Airline Chief Vows Cuts Unless Unions Agree to Less : Labor: American chairman threatens to reduce fleet by 18 more jets, resulting in thousands of layoffs.

American Airlines will continue to shrink and lay off thousands of workers unless pilots and other unionized employees agree to major contract concessions, American Chairman Robert L. Crandall said Friday.

In a speech to securities analysts, Crandall complained that American is making “negligible progress” in talks with its pilots’ union on a new contract. American therefore plans to cut its fleet by another 18 jets, to 631 by the end of 1995--”which means, inevitably, more layoffs as well,” Crandall said.

American, the nation’s second-largest carrier, has said that about 150 workers are associated with each of its planes. So layoffs loom for another 2,700 people, or 3% of the airline’s 94,000 employees.

American spokesman John Hotard declined to say specifically how many jobs would be lost. But he said that if the carrier “gets favorable labor contracts, with the pilots primarily, then American Airlines can stop shrinking and start to grow again.”

The Ft. Worth, Tex.-based airline, the main operating unit of AMR Corp., is undergoing a sweeping restructuring to bolster its profitability. Since 1992, the airline has shed about 5,000 jobs, grounded 93 jets and withdrawn from 25 cities.

AMR--which lost $1.3 billion from 1991 through 1993--posted a $146-million profit for the first half of this year on revenue of $7.9 billion. And despite its troubles, it remains one of the industry’s strongest players.

But Crandall said American is being battered by competition from lower-cost rivals, which “will do serious damage” to American’s yield, or average ticket price, in the third and fourth quarters of 1994.

His remarks rattled investors, and AMR’s stock fell $1.50 a share, to $53.125, in New York Stock Exchange trading. The stock traded as high as $72 early this year.

Crandall said American’s “labor costs remain far out of line,” and he reiterated that it needs to slash its annual labor expense by $750 million, including $300 million in pilot salaries and benefits.

Leslie Hardin, an analyst with BT Securities Corp. in New York, said reducing the airline’s size is Crandall’s “only basic weapon” in trying to persuade its 9,000 pilots and other union employees to accept the cuts.

But the pilots’ union, the Allied Pilots Assn., is “likewise frustrated,” said APA spokesman Gregg Overman. Crandall’s demand that the pilots account for $300 million in savings is “an ultimatum in our view,” Overman said. “We wouldn’t characterize that as negotiation at all.”

Last November, the failure of American and its flight attendants to reach a new contract with concessions triggered a costly five-day strike by the attendants. That dispute is still before a federal arbitration panel.