Last-ditch attempt to avert US air strike

Virtually non-stop negotiations continued yesterday to prevent the potentially devastating strike by American Airlines pilots due to start at midnight last night, that would shut down the largest US carrier and cost the country $200m (pounds 123m) a day.

As talks here under the aegis of a Federal mediator approached the deadline, pressure was mounting on President Bill Clinton to use his emergency powers and declare a 60-day cooling-off period, during which American's operations would carry on as normal while arbitrators came up with a settlement binding on both sides.

The White House yesterday was refusing to tip its hand, as Kenneth Hipp, chief mediator, professed himself "somewhat more encouraged" by developments. But, Mr Hipp warned, "major obstacles" still remained, and management and pilots' union alike have reported next to no progress in the last few days.

The main sticking points are pay - where the company has offered a 6 per cent rise between 1997 and 2000, and the pilots are seeking 11 per cent - and the airline's plans to replace turboprops with small jets at its commuter airline subsidiary, American Eagle.

If the strike goes ahead, an estimated 40,000 travellers a day would be stranded. American, whose proposed alliance with British Airways is under regulators' scrutiny, accounts for 20 per cent of all air travel in the US. It has large hubs at Dallas, Chicago and Miami, and dominates the Caribbean market. The airline cancelled most foreign flights and some round trip domestic flights yesterday.