American Airlines Bankruptcy And Parent Company File For Chapter 11 Protection thoughts
Reports say the parent company of American Airlines filed for bankruptcy protection seeking relief from crushing debt caused by high fuel prices and expensive labor contracts that its competitors shed years ago. According to reports the company also replaced its CEO, and the incoming leader said American would probably cut its flight schedule "modestly" while it reorganizes. The new CEO, Thomas W. Horton, did not give specifics For most travelers, though, flights will operate normally and the airline will honor tickets and take reservations. American said its frequent-flier program would be unaffected according to sources
AMR Corp which owns American, was one of the last major U.S. airline companies that had avoided bankruptcy. Rivals United and Delta used bankruptcy to shed costly labor contracts, reduce debt, and start making money again. They also grew through mergers.
American the nation's third largest airline has a 80 year history It was said the board of directors unanimously decided on Monday night to file for bankruptcy.
In a filing with federal bankruptcy court in New York on Tuesday, AMR said it had $29.6 billion in debt and $24.7 billion in assets. Sources say with reductions to the flight schedule there would probably be corresponding job cuts. American has about 78,000 employees and serves 240,000 passengers per day.
