Chapter 11 For American Airlines

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American Airlines on Tuesday filed for bankruptcy protection, the last of the legacy airlines to do so. Flight schedules will not be affected, said AMR Corp. (PDF), the parent company of both American and American Eagle. American was the only major carrier that wasn't profitable last year, according to The Wall Street Journal. American said its labor contracts cost $600 million more each year than other legacy airlines pay. Those airlines, such as United and Delta, were allowed to void their labor contracts after filing Chapter 11, according to The Associated Press. Contract talks between American and its 8,000 pilots recently stalled.

The pilots are represented by the Allied Pilots Association, which said the bankruptcy news was not unexpected. "It is nevertheless disappointing that we find ourselves working for an airline that has lost its way," says the union blog. "In 2003, American Airlines' pilots provided management with significant cost savings that were characterized as essential to avoiding bankruptcy at that time. During restructuring, we must bargain effectively under duress." AMR also announced on Tuesday that Gerard Arpey, CEO of AMR and American since 2003, has been replaced by Thomas Horton, who was formerly president. The company also said it will trim down its aircraft fleet. "In view of the large number of aircraft we have on order from Airbus and Boeing, we also seek to accelerate our fleet renewal strategy and, as a result, we do not require the use of all aircraft currently in our fleets," the company said in a letter to vendors (PDF). American was founded in 1930, and today has about 78,000 employees.