By Angela K. Brown
The Associated Press

FORT WORTH, Texas - About 2,500 American Airlines' pilots will lose their jobs in the next year as part of the union's $660 million in annual concessions to save the company from bankruptcy, union officials said Tuesday.

Pilots' pay will be cut 23 percent for one year, beginning May 1. After that, pilots will earn 17 percent less than what they're paid now through the six-year contract, said John E. Darrah, president of the 12,500-member Allied Pilots Association.

The pilots have 14 days to ratify the new contract.

"I don't think anybody's thrilled with the significant pay cuts and furloughs ... but the alternative clearly would be even worse," union spokesman Gregg Overman said.

About 21 percent of American's 12,000 active pilots will be laid off, with cuts beginning at the bottom of the seniority ladder, though some would come through retirements. Pilots can be recalled within two years if the airline adds jobs.

Meanwhile, American's parent, Fort Worth-based AMR Corp., asked the Securities and Exchange Commission on Tuesday for more time to file its 2002 annual report.

The company said it was busy with cost-cutting steps and would file soon after completing negotiations with employees, aircraft creditors and vendors.

The agreement gives pilots profit sharing of up to 15 percent annually and stock options. Pilots will retain medical disability but will see some health care changes.

The pilots' concessions were part of $1.8 billion in tentative cuts management secured from key labor unions Monday, taking a huge step toward averting bankruptcy. The Association of Professional Flight Attendants tentatively agreed to $350 million in concessions, and the Transport Workers Union accepted $620 million in givebacks.

The tentative accords still must be voted on by union members. The ratification process was to begin Tuesday and last two weeks, union officials said.

American chairman Donald J. Carty praised union leaders, saying their actions "have enabled us to avoid an immediate filing with the bankruptcy court."

The news lifted shares of American sharply for the second time in two days. AMR shares rose 43 percent, or 90 cents, to close at $3 Tuesday on the New York Stock Exchange as investors considered a bankruptcy filing much less likely now.

But the carrier is not guaranteed a smooth ride; the industry is still battling its worst downturn ever, precipitated by fears of terrorism, an ailing economy and now the war in Iraq.

"If the war lasts for many months or if there's another act of terrorism, then even these cost savings could prove insufficient," said Philip Baggaley, Standard & Poor's airline analyst.