American Airlines shares tumble 18 percent on outlook

(Reuters) - Shares of American Airlines parent AMR Corp <AMR.N> fell more than 18 percent on Monday as analysts debated the prospects for a bankruptcy filing for the third- largest U.S. airline, which lags its industry peers.

Airline stocks were down broadly on concerns that a weak economy will drain travel demand and hit fares this autumn.

But American, seen financially as the weakest major carrier, saw the worst share losses on a percentage basis. The stock was down 15.9 percent, or 47 cents, at $2.49 on the New York Stock Exchange.

"When can they stop the bleeding of cash?" asked Basili Alukos, an equity analyst at Morningstar. The carrier had a second-quarter net loss of $286 million, while rivals showed profits.

"If it appears we're coming into somewhat of a rough patch or slowdown, how is that going to fare for them?" Alukos said. "I don't think very well, because they were unable to generate a profit kind of in the best of times for the airlines last year."

Ray Neidl, a senior aerospace sector analyst with Maxim Group, said in a recent research note that: "Some believe that a prepackaged bankruptcy filing would be the best thing for AMR and the industry."

An AMR spokesman did not immediately respond to a request for a comment on the bankruptcy talk.

American is the only major carrier that did not restructure in Chapter 11 during the recent industry downturn. As a result the airline has operating costs -- including labor -- that are higher than competitors.

Meanwhile, experts warn that an economic downturn could hit travel demand just as airlines are beginning to recover.

The International Air Transport Association on Monday said airline traffic slowed in August compared with July, with the total passenger market down 1.6 percent.

Shares of United Continental Holdings <UAL.N> were down 9 percent at $17.64 on the New York Stock Exchange. Delta Air Lines' <DAL.N> shares fell 7 percent to $6.99 on the NYSE.

(Reporting by Kyle Peterson, editing by Maureen Bavdek)