AMERICAN AIRLINES BACK TO BUSINESS : DISCOUNTS, UPGRADES WOO DISGRUNTLED FLIERS.

Byline: Eric Wahlgren Daily News Staff Writer

Slumped in a chair with a Danielle Steel novel at a Los Angeles International Airport terminal, Val Knapp said Saturday that President Clinton had done her a big favor by blocking the American Airlines strike.

Because of Clinton's call for a 60-day ``cooling-off'' period just minutes after a pilots union declared a walkout early Saturday, Knapp and her husband would soon be on their way to Vail, Colo., to attend a most important event.

``It's our granddaughter's fourth birthday,'' said Knapp, a medical assistant from San Luis Obispo. ``Grandparents have to be there.''

Although the Knapps, like many American passengers, had made backup reservations on another airline, they were worried that any change might louse up their plans, leaving one 4-year-old Coloradan really bummed out.

``We called Bill Clinton and said, Bill, do something,'' she joked.

Worried that many seats on its planes would go empty, American's Dallas-based parent, AMR Corp., slashed fares up to 50 percent Saturday, hoping to woo the thousands of travelers who had switched to other carriers in anticipation of a strike.

The company said American and its commuter carrier, American Eagle, would double frequent-flier miles on all flights through March 14.

``We realize many customers have held off their travel plans on American because of the uncertainty regarding a possible strike,'' said Michael W. Gunn, senior vice president of marketing at American. ``We want to encourage travelers to make their travel plans on American, and to apologize to customers for any inconvenience they have experienced.''

Under the deal, a round-trip ticket from Los Angeles to New York, for example, could cost as little as $388 without requiring passengers to purchase the tickets in advance. Normally, such fares could cost more than $880.

American officials said fewer than 100 flights worldwide were affected as the company braced itself for a strike and that planes would take off as scheduled Saturday.

Burbank Airport officials said the threat of a strike had not, unlike in other parts of the country, resulted in any canceled flights and that the carrier was operating its two daily scheduled flights to Dallas.

``Everything is fine,'' said David Velona, an airport communications coordinator. ``Since Clinton stepped in last night, it has been no big deal.''

Clinton's decision early Saturday set up a Presidential Emergency Board, preventing pilots from striking while the three-member panel proposes a settlement on pay and job security issues between union leaders and the company.

During the 60-day period, the 90,000 employees of the nation's largest domestic airline will remain on their jobs, helping shuttle some 220,000 passengers a day to their destinations.

The board will have 30 days to help AMR Corp. and the Allied Pilots Association resolve their differences. After that, both sides will have an additional 30 days to act on the board's recommendations or reach their own settlement.

If a settlement is not reached and the dispute continues, the pilots could attempt another strike. However, the president would no longer have the authority to intervene.

There was no sign of any new negotiating sessions planned, and negotiators for both sides had left their Washington hotels Saturday.

American pilots have asked for raises totaling 11 percent through the year 2000, but the company has offered 6 percent in raises.

Union leaders and company officials have also clashed over which pilots should fly shorter routes serviced by American Eagle, a subsidiary of AMR Corp., American's parent company.

American Airlines pilots make $120,000 a year on average while American Eagle pilots earn about $35,000 a year, leading some union leaders to fear that some higher-paid jobs may be in jeopardy if there are changes in service.

Some passengers blamed the pilots for sending many travelers into a panic about their travel plans, while others said they sympathized with some of the pilots' demands.

``I am not very apprised of the situation,'' Knapp said, ``but being a pilot seems like a tough job.''

Highlights of American's fare sale

Discounts of roughly 50 percent on excursion fares in all American and American Eagle markets in the United States, Canada and Hawaii through March 14, and 45 percent discounts for travel through May 31. A Saturday night stay is required. Tickets are nonrefundable.

Discounts of roughly 50 percent on excursion fares to Europe through May 31.

Discounts of 25 to 30 percent to the Caribbean and the Bahamas through May 31.

American will also offer double AAdvantage miles, its frequent-flier program, and complimentary upgrades to AAdvantage members.

CAPTION(S):

Photo, Box

Photo: American Airlines is attempting to make up for any inconvenience by offering 50 percent discounts.

John McCoy/Daily News

Box: Highlights of American's fare sale (see text)