CHICAGO -- American and United airlines announced 40,000 layoffs Wednesday as the U.S. aviation industry sank deeper into a crisis touched off by the terrorist attacks.

The parent company of American, the world's largest airline, said it will lay off at least 20,000, or 14 percent, of its 138,350 workers. The cuts by AMR Corp. will affect American, TWA and American Eagle.

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The cuts mirror those by United parent UAL Corp., which amount to 20 percent of its work force of 100,000 people.

United has a major hub at Denver International Airport.

The terrorist attacks have plunged the struggling U.S. aviation industry into a crisis that has cost it nearly 70,000 jobs and billions of dollars in vanished business in little more than a week.

Airlines warn the layoffs could rise to 100,000 and are asking for more than $15 billion in federal aid to keep them from ruin.

Boeing, the No. 1 maker of passenger jets, said Tuesday it will scale back deliveries and lay off up to 30,000 of its 93,000 commercial airline workers by the end of next year.

"This is not a ripple effect," said Rep. Jennifer Dunn, whose district in suburban Seattle includes thousands of Boeing workers who expect to lose their livelihoods over the next year. "This is a tsunami."

Airlines and their suppliers already were hurting from a slowing economy that had businesses cutting back on flying and tourists scaling back vacation plans.

Then came the Sept. 11 attack by terrorists using four hijacked Boeing airliners, the unprecedented two-day ban on commercial flights and expensive new security measures for travelers and airports.

Air travel has remained a shadow of what it was and airlines have been cutting routes and work forces. On Wall Street, airlines' stock took severe blows Monday though most, including AMR, posted slight gains Tuesday and Wednesday.

American Airlines chairman Donald Carty said his company was in a state of emergency.

"This declaration is an official recognition that, hard as it may be to accept, our company's very survival depends on dramatic change to our operations, our schedule, and worst of all our staffing levels," he told employees.

Analysts warn the repercussions could spread to everyone from parts suppliers to travel agencies.

"It's going to reverberate through the entire system," said Paul Nisbet, an aviation analyst with JSA Research.

"We were having a slowdown, but it was a controlled slowdown as a result of the poor economy," Nisbet said. "This made it almost what you would call a panic slowdown."

United had been on pace to lose about $1 billion this year due to the economic downturn and steep labor costs; analysts now say it could lose that much in the second half of the year alone.

Many carriers, including American, Continental, Delta, Northwest and United, have already scaled back schedules by about 20 percent.

Foreign airlines likewise are suffering, with Virgin Atlantic, Dutch carrier KLM, Air France and Germany's Lufthansa among those saying they are scaling back routes, freezing hiring or cutting jobs and rethinking whether they can buy new aircraft.

Northwest spokesman Doug Killian noted that airlines also were hard-hit during the Gulf War 10 years ago, when the industry lost $4.7 billion due to a recession and fear of flying.

"That was a greater loss than the combined profit for the industry in its history since the days of Kitty Hawk," Killian said. "You can certainly look at some past events and see what they did to this industry."

Related industries also feel the pinch. Sabre Holdings Corp., the nation's largest hotel and airline reservation system, reduced earnings expectations Wednesday.

Trying desperately to convey some optimism, Boeing Commercial president and chief executive Alan Mulally said Boeing would go forward with plans to build the new Sonic Cruiser, an airplane that could fly at nearly the speed of sound.

Announcing education grants at a public school Wednesday morning, Mulally clutched a wooden model of the fast plane and sent it on a "test flight" through the audience.

He also said the company has no immediate plans to close any plants. He said airlines are delaying, but not yet canceling, plans to buy new airplanes. He said the company may end up delivering 500 commercial jets this year instead of the expected 538.

"I'm hopeful that this is a one, two-year thing," Mulally said. But he admitted this is an unprecedented event and it's hard to predict the fallout.

"Nobody ever anticipated this kind of a terrorist attack," he said. "This is absolutely gut-wrenching."