Tuesday, November 29, 2011

American Airlines Parent AMR Files for Bankruptcy protection

 AMR Corporation, the parent company of American Airlines  filed for bankruptcy protection in an effort to reduce labor costs and shed a heavy debt burden.

The AMR  and certain of its U.S.-based subsidiaries (including American Airlines and AMR Eagle Holding Corporation), today filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York.

American Airlines  is the third-largest carrier in United States. And, AMR was the last of the major legacy airline companies in the United States to file for Chapter 11.

There will no impact on travelers for now. The airline said in a statement that it would be operating normal flight schedules and honoring tickets, as usual, during the process. It added its frequent flyer program is not affected.

“Our board decided that it was necessary to take this step now to restore the company’s profitability, operating flexibility and financial strength,”  Thomas W. Horton  said in the Statement. Thomas W. Horton will be the new Chairman and Chief Executive of American Airlines, he will be replacing the current CEO Gerald Arpey.

"This was a difficult decision, but it is the necessary and right path for us to take - and take now - to become a more efficient, financially stronger, and competitive airline," Thomas W. Horton said in the statement.

Last month, the airline reported a third-quarter loss of $162 million, or 48 cents a share, due to higher jet fuel prices.

AMR Has $4.1 Billion in Cash to Ensure Uninterrupted Supply of Goods and Services During Proceedings.

One of AMR’s chief goals in bankruptcy will be to lower its labor costs.

More information about American Airlines Chapter 11 filing is available on the Internet at AA.com/restructuring.

American Airlines(AA) was listed at No.120 on the Fortune 500 list of companies in 2010 and is a founding member of the Oneworld airline alliance.

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1 comment:

Anonymous said...

Of course they went bankrupt, who buys a dead stock?
Not me, Not this guy ->

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