Analysts See American, Continental Flying Above Bankruptcy Threat

But American - which barely avoided bankruptcy two years ago - and Continental are also struggling with high fuel prices and big pension obligations.

A spokesman said Continental was better positioned than other network airlines but not immune to rivals getting a cost advantage from bankruptcy protection. He said the company expected to "be a survivor" but that conditions in the industry were more choppy after the latest bankruptcies.

Philip Baggaley, an analyst for Standard & Poor's, said having two more carriers able to shed expenses under bankruptcy protection will pressure American and Continental to further reduce labor costs.

In the short term, however, Baggaley said American and Continental and all other carriers could benefit if Delta and Northwest reduce flights, leading to fewer seats and, in turn, higher fares.

But the legacy carriers banked on high fares until the ascendancy of low-cost airlines such as Southwest Airlines Co. and JetBlue Airways Corp., who took customers away by offering lower fares.

Industry observers doubt that many Delta and Northwest passengers will switch carriers. They said consumers are getting used to bankrupt carriers.

"United filed for Chapter 11 and they're selling all their product," said industry consultant Michael Boyd. "Chapter 11 is just a change in legal proceedings."

AMR shares fell 23 cents, to $11.90, and Continental shares dropped 30 cents, to $11.85, in trading Thursday afternoon on the New York Stock Exchange.

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