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American Airlines files for bankruptcy
Source: Agencies |
November 30, 2011, Wednesday
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AMERICAN Airlines' parent company is seeking bankruptcy protection as it seeks to unload massive debt built up by years of accelerating jet fuel prices and labor struggles.
The third largest United States airline also said yesterday its CEO Gerard Arpey will step down. He's being replaced by Thomas Horton, currently the company's president.
Fort Worth, Texas-based AMR Corp, along with its regional affiliate AMR Eagle Holding Corp said yesterday that they filed voluntary petitions to reorganize.
American says it sought protection to reduce its costs and debt to remain competitive.
The airline says it will continue normal flight operations during the reorganization.
American was the only major US airline that didn't file for bankruptcy protection after the 2001 terrorist attacks. The last major airline to file for bankruptcy protection was Delta in 2005.
American says labor-contract rules force it to spend at least US$600 million more than other airlines.
Besides higher labor costs, American also struggled with rising jet fuel costs. Jet fuel cost an average of US$3 per gallon so far this year - a record according to US government data that goes back to 1990. Jet fuel is more expensive now than the average of US$2.96 per gallon in 2008, when oil rose above US$147 per barrel for the first time.
American lost US$162 million in the third quarter.
The third largest United States airline also said yesterday its CEO Gerard Arpey will step down. He's being replaced by Thomas Horton, currently the company's president.
Fort Worth, Texas-based AMR Corp, along with its regional affiliate AMR Eagle Holding Corp said yesterday that they filed voluntary petitions to reorganize.
American says it sought protection to reduce its costs and debt to remain competitive.
The airline says it will continue normal flight operations during the reorganization.
American was the only major US airline that didn't file for bankruptcy protection after the 2001 terrorist attacks. The last major airline to file for bankruptcy protection was Delta in 2005.
American says labor-contract rules force it to spend at least US$600 million more than other airlines.
Besides higher labor costs, American also struggled with rising jet fuel costs. Jet fuel cost an average of US$3 per gallon so far this year - a record according to US government data that goes back to 1990. Jet fuel is more expensive now than the average of US$2.96 per gallon in 2008, when oil rose above US$147 per barrel for the first time.
American lost US$162 million in the third quarter.
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