American files bankruptcy
AMR Corp., the parent company of American Airlines, has filed for Chapter 11 bankruptcy protection in the Southern District of New York, making it the third major U.S. airline to restructure its business since 2002. Tom Horton chairman, CEO and president of AMR, explained in a video release that services will operate normally during the restructuring, which was a necessary action in order to stay competitive.
"Our board made the responsible determination that by taking decisive action can give American Airlines a brighter future tomorrow," said Horton, who recently replaced Gerard Arpey at the helm of the company.
In a written Q&A specifically addressing cargo, American predicted that there would be no changes to shipping policies and procedures. The move also will not have an impact on interline carriers, according to the document.
In the video, Horton also pointed out that most of American's competitors have already restructured their businesses through Chapter 11 and that some have even merged together to form stronger bonds. United went through the same process in late 2002, emerging from the restructuring process in 2006. Delta filed for bankruptcy protection in 2005, and US Airways pursued protection in 2002 and 2004.
It isn't yet known how the news will impact Americans pending plane orders. In July, American officials announced what they called historic agreements with Boeing and Airbus that called for the acquisition of 460 B737s and A320s between 2013 and 2022. That same day, officials announced AMR officials announced that it experienced a net loss of $286 million during the second quarter of 2011. The company announced in October that net losses for the third quarter topped $160 million, compared to a net profit of $143 million.
Even amid all these challenges, the view from the top is optimistic. "We have the potential to overcome the last hurdle between us and lasting success by achieving a competitive cost and capital structure," Horton said. "We can and will reaffirm American's place among the world's premier airlines."