American Airlines offers to drop plans to lay off pilots

The airline also gave ground on other areas including pay, where it is now offering increases.

In exchange, American would get more flexibility to hire other airlines to fly bigger regional jets and to sell seats on other airlines' flights — moves that its pilots have long opposed as threatening their job security.

American disclosed the changes shortly after a federal judge granted a one-week delay in ruling on American's request to throw out existing labor contracts.

The judge's decision gives the pilots' union more time to consider American's final offer.

US Airways Group Inc. wants to buy American parent AMR Corp. out of bankruptcy and has lined up support from American's three unions, which represent pilots, flight attendants and ground workers.

The unions have disparaged AMR's turnaround plan as lacking a strategy to boost revenue. The leaders of American's unions and top executives at US Airways argue that the two carriers must combine to compete against industry giants United and Delta. American is the nation's third-biggest airline and US Airways is fifth, just behind Southwest in passenger traffic.

But if American can win six-year cost-cutting deals with pilots, and possibly also with mechanics, it could demonstrate to creditors that it has a workable plan to reduce costs and come out of bankruptcy as a profitable operation. That's been the goal of AMR CEO Thomas Horton.