American Airlines​’ parent, AMR files for bankruptcy

American Airlines​’ parent, AMR, has filed for Chapter 11 bankruptcy in the US, marking the last of the major US legacy carriers to avail itself of bankruptcy protection as it moves to slash its cost structure in the face of intense industry competition.


American Airlines AMR bankruptcy Chapter 11 restructuring


American Airlines​’ parent, AMR, has filed for Chapter 11 bankruptcy in the US, marking the last of the major US legacy carriers to avail itself of bankruptcy protection as it moves to slash its cost structure in the face of intense industry competition. The move to opt for Chapter 11 will essentially give American some breathing space to continue normal operations of both its passenger and cargo businesses, while undertaking the necessary restructuring to streamline and cut costs.

 “There have been no changes to AA Cargo shipping policies and procedures. Any cargo currently in transit within our system will continue as scheduled. Efficient and reliable service remains our priority,” AA Cargo said in a statement.

Despite negotiating labor cost reductions with its unions in 2003 in the wake of United’s and USAir’s bankruptcies, American continued to suffer from higher unit costs than its competitors. This included not just labour costs but the carrier’s ageing fleet that has translated to an extra high cost burden due to historically high fuel prices. American was also the only major US airline to lose money when the economy turned around in 2010.