D/FW, led by American Airlines, links North Texans and their business to points across the globe. But the carrier's financial troubles expose just how much its jets propel the region's economy.

As a double whammy of war and a weak economy slows demand for travel, longtime civic leaders and recent techie transplants alike fret that a hobbled American could leave deep scars on the Dallas-Fort Worth economy.

"I'm dependent on D/FW for the life of my company, on American itself," said Cynthia Driskill, owner of CDG & Associates in Carrollton, a consulting firm specializing in human resources software.

"Our consultants fly every single week," she said, calling from an Admirals Club at New York's LaGuardia Airport. "We use the club to extend the workday. It's really made a huge difference in the quality of our traveling lives."

American is woven into the fabric of North Texas life. Businesses across the region say they're here largely for the convenience of frequent flights to either coast - and beyond. Companies with far-flung global operations regularly fly executives into the airport, effectively using Admirals Clubs or local hotels as their branch offices.

The double-A logo shows up on everything. It's on the Citibank AAdvantage credit cards that so many people in the area use for their purchases. The logo adorns the lists of donors on Dallas Symphony Orchestra programs. Even the toilets at American Airlines Center in Dallas fly the familiar symbol.

North Texans have a fierce fidelity to American, one that's grown ever since D/FW launched its first flights in 1974 on the prairie "a long drive out" of Dallas. Five years later, the airline relocated its headquarters to D/FW from New York and established a dominance at the airport in 1982 after homegrown Braniff International Airways was liquidated.

"Dallas was always a good city," said Ted Strauss, senior managing director of Bear, Stearns & Co. in Dallas. "But it never became a great city until D/FW was built."

Loyal to convenience

Fidelity to American was born largely out of convenience. The world's largest carrier serves 146 cities in 38 countries. Passengers can fly to 107 of those cities nonstop from D/FW.

But the airline has also commanded loyalty because travelers had little choice. American is by far the largest carrier at D/FW, controlling 82 out of 127 gates.

With a 26,500-person payroll in North Texas, American is the region's largest employer.

Yet today, for all its might, American finds itself exceptionally close to filing for bankruptcy. Last week, after tense negotiations, the carrier reached tentative agreements with its unions to cut about $1.6 billion in costs. The unions could still reject the deals in upcoming votes.

But although the agreements stave off a trip to the courthouse, the airline must slash costs to save cash. As a result of concessions, at least 7,000 employees company-wide will probably lose their jobs. Those that remain face steep pay cuts of about 23 percent.

Every dollar lost in payroll takes out about $1.80 in spending, said economist Ray Perryman. "Those employees will be spending less cash out in the community," he said. "It'll be billions but spread out over a number of years."

It wasn't supposed to be this way. For years, boosters said, D/FW Airport proved that North Texas didn't need a seaport to thrive. The economy, instead, could run on jet fuel.

Draw for corporations

Led by American, D/FW has enabled North Texas to shrug off its fate as a second-tier business center. More than just a transportation node, aviation became the catalyst for the economic development of an entire region.

"It was the biggest thing to ever happen in Dallas since turning the lights on," said Mr. Strauss, a Dallas resident since 1947. "Without American, there wouldn't be a D/FW."

The birth of this region's aviation age became a beacon for other corporate relocations from the Snow Belt. In succession, Caltex Petroleum Corp., Diamond Shamrock Corp. and the Associates Corp. of North America made North Texas home. That trend has hardly abated. In 2001, Kinko's moved to the region in the middle of an economic downturn, in large part, because of the airport.

As the region has grown in the last three decades, the airport's marketing has evolved as well. But it always stuck to a theme of connection. In 1984, as the airport launched a campaign to bring in more international traffic, the slogan became: "D/FW International Airport, passport to the world."

Each day, more than 44,000 people take off or land on an American plane at D/FW.

The airline either directly or indirectly accounts for a good part of the airport's $300 million budget. Airport officials point out that even if American should seriously falter, the economic impact from a loss of flights would be minimal. Passenger demand will lure other carriers to replace any routes American drops.

"We don't want to be too bullish that everything is perfect, because it's not," said Kevin Cox, D/FW Airport's senior executive vice president. But "given we're the sixth travel market, we will always have airlines to serve here."

The North Texas Commission estimates that aviation-related businesses bring in $23 billion to the local economy - including $5 billion in salaries.

"The performance has far exceeded anybody's expectations or predictions," said Dan Petty, president of the North Texas Commission.

That makes American's problems loom even larger.

"This is the most volatile time in airport/airline financing in terms of unprecedented and continued losses," said Kurt Forsgren, a director at the credit rating agency Standard & Poor's in San Francisco. "This will be a good bellwether and waterline for the future. How well airports perform in this current marketplace should tell a lot about the ability to weather storms in the future."

D/FW's financial fundamentals do give the airport advantages others don't have, Mr. Forsgren said. To that end, the airport has made cuts, including reducing its budget by $11 million last year. Mr. Cox said the airport transferred $10 million from a capital account into its operating account so it could lower landing fees for struggling airlines.

A recent billion-dollar bond issue to support the airport's $2.6 billion capital development fund includes a provision to delay payments due by airlines until 2005. By that point, the industry will have regained stability, Mr. Cox said.

In the meantime, the ranks of the American payroll will shrink, and that could put pressure on airport finances and the North Texas economy.

"Any time an operation like that has any kind of diminished activity, it has some negative effect on the region," said Mr. Petty of the North Texas Commission.

Boom and bust

Just a few years ago, the airlines enjoyed halcyon days of go-go business executives who had to be there - no matter the cost. Profits soared.

But when the tech bubble popped, and the economy went south and business travel is not expected to return to those robust heights. The 9-11 terrorist attacks exacerbated the drop in passenger traffic. To stem that cash loss, thousands of employees were cut from the payroll. Still, American took a hard hit in the last 18 months as corporate scandals continued to freeze business spending, further cutting airline revenue.

That economic pain comes on top of an already weak regional economy, battered by the downturn in telecom.

"If they got every penny they are asking for from unions, it wouldn't be enough to get positive cash flow," said Bernard Weinstein, director of the Center for Economic Development at the University of North Texas in Denton.

After mostly unsuccessful attempts at gaining concessions from unions, both UAL Corp.'s United Airlines and US Airways Group Inc. preceded American into bankruptcy court. While US Airways emerged last week as a newly reorganized airline, experts say the odds are against success. Chances are United might not be so lucky, and it might have to be liquidated.

Many fear that American could share that same fate.

"The thought of losing a major carrier would be devastating, for the businesses that are here and those that could be coming here," said Stephen Chipman, regional managing partner, the Grant Thornton accountancy in Dallas.

But saving commercial aviation, experts say, might take nothing less than a wholesale restructuring of the entire industry.

What will the carriers look like after the current crisis?

"The notion of hubs may be a thing of the past," Dr. Perryman said. "9-11 made people question if they have to fly as much as they did. The answer is no. Will airports be the engines they once were?"

A hub system of some kind will remain, Mr. Forsgren said. "That is still the most efficient way to getting persons from point A to point B," he said.

E-mail ashah@dallasnews.com