FORT WORTH, Texas — American Airlines and its parent company are filing for bankruptcy protection as they seek to cut costs and unload massive debt built up by years of high jet fuel prices and labour struggles.
The third-largest U.S. airline also said Tuesday that CEO Gerard Arpey had stepped down and was replaced by company president Thomas W. Horton.
AMR Corp. has continued to lose money while other U.S. airlines returned to profitability in the last two years.
Horton said the board of directors unanimously decided to file for bankruptcy after meeting Monday in New York and again by conference call on Monday night.
American said it would operate normally while it reorganizes in bankruptcy. The airline said it would continue to operate flights, honour tickets and take reservations. It said the AAdvantage frequent-flier program would not be affected.
Horton said, however, that as the company goes through a restructuring it will probably reduce the flight schedule “modestly,” with corresponding cuts in jobs.
The company will delay the spin-off of its regional airline operation, American Eagle, which was expected in early 2012. AMR Eagle Holding Corp. also filed for bankruptcy.
American was the only major U.S. airline that didn’t file for bankruptcy protection in the aftermath of the 2001 terrorist attacks that triggered a deep slump in the airline industry. The last major airline to file for bankruptcy protection was Delta in 2005.
Source: The Chronicle Herald