Michael Mulvey/Reuters Federal law restricts strikes by airline pilots, but some of American's unionized pilots have refused to work overtime hours or called in sick

American, a unit of AMR Corp., will consider asking the courts to restore service before the busy three-day President's Day holiday weekend if pilots do not end their job action soon, the airline's Chief Executive Officer and Chairman Don Carty said.

"It looks like today we'll be up to almost 500 flights canceled," Carty told reporters a news conference at American Airlines headquarters at Dallas-Fort Worth International Airport.

"There are an average of 100 passengers per flight, so that many were inconvenienced (by cancellations)," Carty said.

Pilots started the slowdown Saturday to back their demands that American integrate newly acquired Reno Air Inc immediately so that lower paid Reno pilots come up to the same contract terms as those at American.

American, which says it needs 12 to 18 months to make Reno operate as part of the bigger airline, had to cancel 90 flights Saturday and 240 Sunday.

Carty said American had asked the Allied Pilots Association, which represents American pilots, Monday to end the slowdown and return to talks. "We will think about court action if the APA is not responsive," he said.

"The issue is whether the job action that is occurring is consistent with the law, and only a court can determine that," he said.

Federal law restricts strikes by airline pilots, but some of American's unionized pilots have refused to work overtime hours or called in sick.

Passengers interviewed at airports Monday reported various delays, mostly minor, and American said it was attempting to reschedule those whose flights were affected.

Wall Street took note of the slowdown, as stock in AMR Corp., the parent company of American, fell $2.91 to $57 on the New York Stock Exchange, leading a sell-off in airline and other transportation stocks.

The Allied Pilots Association, which represents American's pilots, contends American is violating its pilots contract by operating Reno as a separate airline.

A major unresolved issue, the union said, is the pay scale for Reno pilots who make about half the $150,000 annual average earned by American's pilots.

Carty said the airline had made an offer to the Allied Pilots Association, which represents about 9,200 American pilots, Friday night to end the dispute but had not heard back from the organization.

"We continue to be prepared to meet with the APA and hear their counterproposals," Carty said.

Pilots fear American intends to operate Reno as a separate airline, which they say violates terms in their labor contract that require all aircraft owned by American to be flown only by American pilots. They fear that American could divert business from American to the lower-cost Reno Air, reducing job opportunities for pilots at American.

"There's a tremendous amount of resentment on the part of the pilots," said Chad Smith, a spokesman for the union based in New York. Smith said by allowing pilots at Reno to work at lower wages, American has created "a lower-tier wage system" outside the negotiated labor contract.