The Dallas Morning News is reporting that an American Airlines chapter 11 filing may come as soon as May. Most observers had previously said end of 2003/early 2004.

Normally I’d assume this was just American’s posturing to convince their employees to give in to concessions. But the piece suggests that this is the conclusion of the pilots union, not the airline.

United may have waited too long to enter bankrupty, with only $800 million in available cash on hand. That gave tremendous leverage to the institutions offering debtor-in-possession financing.

While American has about $2.7 billion, they also have very large debt payments coming up. American could choose to restructure those payments off into the future, or they could decide simply not to make the payments — going bankrupt instead in order to conserve their cash for restructuring.

The wildcard is a war with Iraq. If that happens, and a government bailout doesn’t follow (please don’t let it follow..!), American’s losses could accelerate, making Chapter 11 inevitable.