American Airlines Files For Bankruptcy

An American Airlines plane is moved from a gate at Washington's Ronald Reagan National Airport. (AP)

By: THE ASSOCIATED PRESS

DALLAS – American Airlines and its parent company are filing for bankruptcy protection as they try to cut costs and unload massive debt built up by years of high fuel prices and labor struggles. There will no impact on travelers for now.

The nation’s third-largest airline also said Tuesday that CEO Gerard Arpey 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, honor 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 Street: American Airlines CEO: How We Do Things Differently

Guest:

Ted Reed, airlines reporter for thestreet.com

We welcome comments from all of our listeners. Post below. Please stay on topic and be civil. Comments may be moderated by us, but you are solely responsible for the content of your comments.

Lynn Dunn

Oh my, you hit the nail on the head…….the entitlement trap……….as an aunt i helped create the give me nieces and nephews, they are in their mid twenties…………they think i’ve lost my mind…….telling them now………go rent a hotel room if you want to party down with your friends……….the family beach home is for family………is there any hope other than the terrible economy