American Airlines' Parent Files for Bankruptcy
American Airlines’ parent company said Tuesday it needs to achieve a competitive cost and debt structure as it filed for Chapter 11 bankruptcy protection.
The company, which also owns American Eagle and several subsidiaries, says it is at a “substantial disadvantage” versus competitors who have previously gone through reorganizations in bankruptcy. It cited circumstances it faces such as global economic uncertainty as well as volatile and rising fuel prices.
American said there were would be no immediate changes to its service as a result of the Chapter 11 bankruptcy filing in New York on Monday.
However the company did not affirm it would eventually cut some flight routes. The company said in a Q&A sheet on its website that it intends to maintain a “strong presence” in both domestic and international markets.
“American Airlines and American Eagle are operating normal flight schedules, and our reservations, customer service, AAdvantage program, Admirals Clubs and all other operations are conducting business as usual,” AMR Corp said in a statement.
The company said payments to suppliers for goods and services tendered before the petition cannot be made without court permission. However it says it will be able to pay vendors for goods and services it orders after the bankruptcy petition.
“It is impossible to predict before approval of the Plan of Reorganization how much holders of general unsecured claim will receive,” the company said.