American is continuing negotiations

Some industry watchers think the world's biggest airline could file for bankruptcy within days.

"We think time has run out, primarily because of the Iraq war," said a report by Buckingham Research Group.

"We expect that American will file for Chapter 11 (bankruptcy) as early as Sunday."

But the airline is hoping to stay afloat by renegotiating debt arrangements and reaching a cost-cutting agreement with its staff.

Discussions are expected to go on throughout the weekend.

Pilots promise deal by Monday

On Thursday American's parent company, AMR, said it was in talks "around the table, around the clock," with each of its unions.

The group said it was asking all employees, including management, for a total of $1.8bn (�1.1bn) in permanent, annual savings to help save the company.

On Friday the union representing flight attendants said it had presented a proposal to the company that would meet the airline's goal of achieving $340m in cuts from flight attendants.

American has already reached agreement with its fleet service workers.

The union representing pilots said it planned to have a deal concluded by Monday.

Analysts said the airline was currently burning through more than $5m a day because of a fall in bookings following the outbreak of war in Iraq.