Don't miss

Replay


LATEST SHOWS

ENCORE!

Contemporary art takes over the French capital and the countryside

Read more

FOCUS

'China's Silicon Valley' symbolises high tech, prosperity and social inequality

Read more

REVISITED

Video: In St. Petersburg, legacy of Nazi siege lives on

Read more

ACROSS AFRICA

30 years on, FRANCE 24 meets sole survivor of Burkina Faso's counter-coup

Read more

FRANCE IN FOCUS

Paris, the city of love, lights and... traffic jams

Read more

BUSINESS DAILY

French lawmakers approve tax on sugary drinks

Read more

IN THE PAPERS

Lulu the labrador flunks out of CIA K-9 academy, becomes internet sensation

Read more

EYE ON AFRICA

Protests continue in Togo despite ban on weekday demonstrations

Read more

IN THE PAPERS

'The fall of the comedy king': Canada hit by sexual harassment scandal

Read more

Business

American Airlines files for bankruptcy protection

Text by News Wires

Latest update : 2011-11-29

American Airlines and its parent AMR Corp filed for bankruptcy protection on Tuesday following a breakdown in negotiations with employees to reduce labour costs. The airline had also been suffering from high fuel prices.

REUTERS - American Airlines and its parent company AMR Corp filed for bankruptcy protection on Tuesday after failing to win a deal with pilots earlier this month to pare its labor costs.

AMR had been the only major U.S. carrier to avoid bankruptcy proceedings in the past decade, a move its rivals had used to restructure their labor agreements and cut costs.

That left AMR, the third-largest U.S. airline behind United Continental Holdings Inc and Delta Air Lines Inc, with the highest costs in the industry, and the only major airline that still must fund worker pensions.

The airline said last month it was also suffering from soaring fuel prices that sent its costs 40 percent higher in the third quarter from a year earlier.

AMR also on Tuesday named Thomas Horton as its chairman and chief executive, replacing Gerard Arpey, who retired, the company said in a separate statement.

Under its Chapter 11 filing in a New York court, the company listed assets of about $24.72 billion, while it has liabilities of $29.55 billion. The company said it has $4.1 billion in cash.

AMR said both American Airlines and American Eagle are expected to fly normal schedules throughout the Chapter 11 process.

“We plan to initiate further negotiations with all of our unions to reduce our labor costs to competitive levels,” CEO Horton said.

AMR’s top rivals, UAL Corp and Delta Air Lines, which both used bankruptcy protection to slash costs, have since found merger partners—Delta bought Northwest Airlines and UAL Corp bought Continental Airlines to form United Continental Holdings.

AMR has been in labor talks with its pilots for five years, and a wave of pilot retirements in October had prompted speculation the airline was nearing a bankruptcy filing.

Some industry watchers believed the pilots chose to retire to lock in pension values that may now be in jeopardy as the company moves through bankruptcy court.

The company said the bankruptcy has no direct legal impact on operations outside the United States and it was not considering debtor-in-possession financing.

It said Weil, Gotshal & Manges LLP is lead counsel on the case.

Date created : 2011-11-29

  • AVIATION

    Boeing's largest-ever order set to boost US economy

    Read more

  • AVIATION

    Qantas resumes flights after court rules on labour dispute

    Read more

  • AVIATION

    Air France cancels 15% of flights as strike enters third day

    Read more

COMMENT(S)