Oil prices rose yesterday after Iran called on fellow members of industry cartel the Organisation of Petroleum Exporting Countries (OPEC) to agree to cut production when they meet next week, in an attempt to halt a price slide.
American Airlines' shares rose 22.7 per cent after staff ratified a cost-cutting survival plan, narrowly averting bankruptcy for the world's biggest carrier.
The stock of American Airlines' parent, AMR Corp, leapt 96 cents to $5.19 in late-morning trade in the US.
Flight attendants, who had rejected the cuts the day before, changed their minds at the last minute on Wednesday evening after being given an extra day to switch their votes.
Pilots, mechanics and other ground workers had all voted on Tuesday to ratify the union-management cost-cutting deal, part of a scheme to remove $1.8 billion (€1.6 billion) in annual labour costs.
But the deal would have fallen through without all parties behind it.
"AMR dodged the bullet, just barely," according to Blaylock & Partners analyst Mr Ray Neidl.
The total cost savings goal at AMR, including the labour cuts, was $4 billion a year, he said.
"AMR is not totally out of the woods yet as bankruptcy could still happen but we rate the probability at no more than 20 per cent for the remainder of the year," Mr Neidl said in a report.
Major risks ahead included terrorist attacks, the spread of Severe Acute Respiratory Syndrome (SARS), industry overcapacity and a weak balance sheet, he said.
"Absent a major catastrophic event, the company should be able to reduce costs to survive in a slow economic environment."
The main financial hurdle for AMR was renegotiating covenants on an $835 million revolving credit line, which is due on June 30th, analysts said.
American Airlines said it was not yet out of danger.
"Given the hostile financial and business environment we find ourselves in and its inherent risks, the success of our efforts is not assured," according to AMR's chairman and chief executive, Mr Don Carty. However, he thanked the staff for backing the survival plan.
Under the plan, pilots take a cut of $660 million, flight attendants $340 million, and mechanics and ground staff under the Transport Workers Union $620 million.
Agents take a cut of $80 million and management another $100 million.
