An AP story by Brad Foss leads with, "American Airlines is burning through $5 million a day with little relief in sight, making industry experts nervous that the world's largest carrier is increasingly at risk of following United Airlines and US Airways into bankruptcy court."

He says the equation is familiar: revenues are down; costs haven't been cut fast enough; and time is running out.

Time is money.

In a business that's running $5 million in red ink a day, time is, quite literally, money. As American fights work rules, renegotiates labor contracts, and tries to wriggle out of leases, gate agreements, food contracts, and any other potential overspending agreement -- that precious time keeps running.

Passengers, especially "leisure passengers" -- those who don't have to fly -- are staying away, even with cheap tickets' being dangled before them. Additional hassles imposed by our friends at the TSA -- including parking, screening, and ambiguous 'no-carry' lists, have added time to the trips, as well, in addition to the public humiliation that now is part of every airport visit.

As the hassles make airline travel less-relaxing, and as they add time to every trip,Americans are again discovering their cars; and, once the trip has been made, the airlines' revenue stays low.

First, biggest expense: people.

American, like all big employers, has a lot of employees, who are generally well-paid for their work. That's no problem in a growing business; but it's akin to arterial bleeding as business contracts. With labor laws that prevent immediate and draconian measures that the situation may require, American is left with the option of going back to its unions, and asking politely for the workers to do the same work, for maybe a quarter, or a third, less money. A lousy second option would be to cut perhaps a third of the workforce; but that could leave the remaining essential employees stretched to the point of chronic sickness and absenteeism.

Which way out?

American, assuming its unions aren't going to volunteer to take pay cuts, is left with two ways out; and only one of those is "good." If the economy improves to the point where leisure travelers have the money to fly, and they somehow won't mind the additional hassles and wasted time at "security," sufficient numbers of passengers may return, that American might make a living, even without major restructuring. If United goes to the auction block, American will inherit a lot of 'captive' business fliers, as will most majors, as United's former customers discover that their regular airline isn't available.

In the meantime, expect those things management can control directly, to get additional attention: routes, flights, aircraft retirement. The problem is, most of the 'obvious stuff' has already been addressed.

No matter whether American's short-term problem leads, or does not lead, to Chapter 11, the airline faces some major revision, in all parts of its operation, strategy, and hierarchy. Even if things start to improve in the domestic economy, a war with Iraq could scare PAX; and fuel costs will certainly escalate. Five million dollars a day, today's red-ink flow, simply cannot go on forever.

The question is, 'Will American have the chance to make the choice?'

FMI: www.amrcorp.com