American Airline owners file bankruptcy petition
November 30, 2011
AMR Corporation, the parent company of American Airlines (AA) and its cargo division, yesterday filed voluntary petitions for Chapter 11 reorganisation in the US Bankruptcy Court.
The Chapter 11 process enables AA to continue normal business operations while it restructures debt, costs and other obligations.
The parent company has assured customers that its American Airlines, American Eagle and AmericanConnection carriers will maintain cargo operations.
A statement by AA Cargo confirmed: “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.”
AMR said the bankruptcy move was necessary “to achieve a cost and debt structure that is industry competitive”.
Its new Chairman, CEO and President, Thomas Horton, said: “Our very substantial cost disadvantage compared with our larger competitors, all of which restructured their costs and debt through Chapter 11, has become increasingly untenable, given the accelerating impact of global economic uncertainty and resulting revenue instability, volatile and rising fuel prices, and intensifying competitive challenges.
“We are committed to working as quickly and efficiently as possible to appropriately restructure American so that it can emerge from Chapter 11 well-positioned to assure the company’s long-term viability and its ability to compete effectively in the marketplace.”
AMR has approximately US$4.1 billion in unrestricted cash and short-term investments, as well cash generated from operations, which it anticipates to be sufficient to assure that vendors, suppliers and other business partners will be paid in full for goods and services provided during the Chapter 11 process.
Courtesy of IFW
