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A flamenco dancer shimmied and snapped her fingers for the large crowd of local and state politicians, employees, and reporters who converged on Dallas/Fort Worth International Airport on May 1 to celebrate American Airlines' new nonstop service to Madrid. Servers handed out glasses of wine, and people stood in line for fancy appetizers.

The mood was festive despite a deep recession that has businesses slashing their travel costs, families postponing vacations, and the airline industry reeling from revenue losses.

Daniel P. Garton, executive vice president of marketing at the Fort Worth-based airline, was preparing to speak to a large crowd that included Texas First Lady Anita Perry, U.S. Rep. Eddie Bernice Johnson, and Fort Worth City Council member Kathleen Hicks. But he took a few moments to speak with Fort Worth Weekly on the industry's recent woes, from the struggles to pay for fuel in 2008 when oil was selling at a record $147 a barrel to staying afloat in 2009 with financial markets drying up.

"You feel like it's out of the frying pan and into the fire," he said.

It's one of several metaphors getting tossed around to describe the company's financial climate these days.

" 'Perfect storm' is a phrase that gets used way too much, but if you look at American ... ," company financial spokesman Andrew Backover said recently, before he launched into a description of the airline's rocky status.

In the airline industry, "Everybody has a cold; American Airlines may have a touch of pneumonia in a couple of areas," analyst and consultant Bob Mann, of R.W. Mann & Co., said.

Losing this patient would be particularly painful around these parts. American is the primary carrier at D/FW Airport, which in turn is a vital spark plug for the North Texas economy.

"There is no question that American Airlines is one of the biggest employers in the D/FW area and accounts for about 80 percent of all the air passenger traffic at D/FW Airport," said Bernard Weinstein, director of the Center for Economic Development and Research at the University of North Texas. "If they were to somehow disappear, that would have a devastating impact."

The tragedy of 9/11 spurred an industry landslide. Every major airport in the country was shut down for several days. Congress, federal agencies, and airline officials frantically tried to boost security, but even after the airports were open again, people were scared to fly for a while. An estimated 100,000 workers at the country's major airlines were laid off.

Shortly after that, fuel prices began escalating. The industry lost untold billions of dollars in revenue, and airlines began flying into bankruptcy courts. Many employees saw their pay slashed and hours increased.

American Airlines is among the world's largest carriers, employing more than 80,000 people worldwide, including about 25,000 locally. By 2003, however, it too was teetering. The company staved off bankruptcy, saved many of its jobs, and struggled onward.

Lately things have been bad enough that news reports about an American Airlines pilot who flunked a breath test prior to working a flight from London to Chicago registered as only a small blip on the radar.

Parent company AMR Corp. lost $375 million in the first quarter of 2009 - up from $341 million during the same period in 2008.

Employees are picketing and grumbling about exorbitant salaries paid to executives. The airline has had a contentious relationship with its workers ever since former chairman Robert Crandall began his autocratic rule in the 1980s. But now, for the first time in American's history, all three of its labor groups - pilots, flight attendants, and transport workers unions - are in mediation at the same time.

The company's fleet of airplanes is aging and dominated by gas-guzzling MD-80s. Reports of maintenance lapses resulted in the entire fleet of MD-80s being temporarily grounded amid increased scrutiny from federal inspectors last year. The airline and the Federal Aviation Administration appear to be in a pissing match that could have serious consequences.

Former flight attendant Alicia Lutz- Rolow arrived in Fort Worth last year to receive an award from American but instead took the podium to accuse company executives of greed and corruption. Her comments later aired on MSNBC. Now she has published The Plane Truth, a scathing attack on the company and its management.

Meanwhile, a share of the company's stock is selling for less than a six-pack of Bud Light. The same share would have sold for $40 several years ago.

But this ain't the company's first rodeo, or perfect storm, or frying pan, or case of pneumonia. While the auto industry and others have been begging for federal bailouts, American has tended to business, made adjustments, and appears to be maneuvering itself to weather the economic squalls.

A recent stroll through hallways at American Airlines headquarters revealed a slight darkness - literally. Long rows of light fixtures designed to hold three fluorescent bulbs had been stripped of their middle bulbs. Hundreds of bulbs throughout the building were removed almost two years ago.

"I noticed the difference in the lighting the first day," company spokesman Tim Wagner said. "Since then I don't even notice it."

Worn-out carpet was replaced with carpeting made of recycled material, automated paper towels systems were installed in bathrooms to discourage waste, and moisture-monitoring systems were added so the lawn isn't over-watered.

Even the small lightbulbs in the candy machines have been removed.

"Being more efficient is good for us and good for the environment," Wagner said.

American Airlines initiated the efficiency programs to help the company bottom line by squeezing out some savings, then set about last summer squeezing some extra income from passengers. Extra charges for checked baggage angered many travelers but helped the airline keep afloat at a time when the company was reeling from record-high fuel prices.

With the airline tightening its belt, company officials expect workers to do the same. Employees, however, see things differently. They say their belts are already so tight they can barely breathe. Labor groups gave up pay and benefits in 2003 to help save the company from bankruptcy. Now pilots, flight attendants, and transport workers - the three main labor unions - are seeking repayment for their loyalty.