Aviation News

November 29, 2011

American Airlines and Parent Company AMR File for Bankruptcy

More articles by »
Written by: BNO News
Tags: , ,

AMR Corporation, the parent company of American Airlines and American Eagle, announced on Tuesday that it has filed for Chapter 11 bankruptcy.

The company said that, in order to achieve a cost and debt structure that is “industry competitive” and thereby assures its long-term viability and ability to continue a “world-class travel experience” for its customers, AMR and its U.S.-based subsidiaries, including American Airlines and American Eagle, have filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court in New York.

AMR’s Board of Directors said in a statement that it had determined that a Chapter 11 reorganization is in the best interest of the company and its stakeholders. The move had long been expected, but most analysts believed it was at least a year or more away.

According to the company, the Chapter 11 process will enable American Airlines and American Eagle to continue conducting normal business operations while they restructure their debt, costs and other obligations. Both airlines are operating normal flight schedules on Tuesday.

In addition, AMR said it has approximately $4.1 billion in unrestricted cash and short-term investments which it will use to pay for its vendors, suppliers and other business partners during the Chapter 11 process. The filings will have no direct legal impact on American’s operations outside the United States.

“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,” said Thomas W. Horton, Chairman, Chief Executive Officer and President of AMR and American Airlines.

Meanwhile, the Board of Directors of AMR Corporation appointed Tom Horton as Chairman and Chief Executive Officer of the Company, succeeding Gerard Arpey who informed the Board of his decision to retire. Horton will also succeed Arpey as Chairman and Chief Executive Officer of American Airlines and will retain the title of President.

About the Author

BNO News



CLOSED: Winter Storm Stella Takes Aim at Northeastern US and Eastern Canada

Winter Storm Stella is taking aim at the Northeastern United States and Eastern Canada early this week. We'll have your latest updates on the storm and its impact on air travel here.
by NYCAviation Staff


DOJ’s “Collusion”: You Scratch My Airplane’s Back, I’ll Scratch Yours

The Department of Justice's charges of collusion at multiple airlines should come as no surprise to the ironic actions of none other than... The Department of Justice.
by Erika Armstrong



Airline Globalization’s History: Once An Advantage, Now a Threat

The debate between U.S legacy airlines and the "ME3" has been getting hotter and hotter, though airline globalization has been around since the beginning.
by John Steffen


American Express Opens The Centurion Lounge at Miami International Airport

In response to cardholder feedback, the new lounges offer an experience similar to the one AmEx offered in its previous partnership with American Airlines.
by Mark Lawrence


All Settled In: The American Airlines 787 Experience Two Weeks Later

Now that the fanfare of their initial launch has died down, what is it like to fly the new American 787? What sets this aircraft apart? Jeremy Dando explores and explains.
by Jeremy Dando