- Share this article on Facebook
- Share this article on Twitter
- Share this article on Email
- Show additional share options
- Share this article on Print
- Share this article on Comment
- Share this article on Whatsapp
- Share this article on Linkedin
- Share this article on Reddit
- Share this article on Pinit
- Share this article on Tumblr
American Airlines and its parent company, AMR Corp., announced Tuesday plans to file for Chapter 11 protection to attempt to unload a large debt accrued from years of high jet fuel prices and ongoing labor struggles.
It was also announced that CEO Gerard Arpey had stepped down and has been replaced by company president Thomas W. Horton, the Associated Press reports.
The company, which was the only major U.S. flyer not to file for bankruptcy following the September 11 terrorist attacks, which triggered a long-running slump in the industry, has continued to lose money over the last two years as other companies began making profits again.
Horton said AMR Corp.’s board of directors unanimously decided to seek Chapter 11 status after meeting Monday in New York and again by conference call Monday evening.
The airline said its AAdvantage frequent-flier program will not be affected and it will continue to operate flights, honor purchased tickets and take reservations during its bankruptcy reorganization.
However, Horton said the projected spin-off of its regional line, American Eagle, which was scheduled for early 2012, will be delayed. AMR Eagle Holding Corp. also filed for bankruptcy.
Horton also cautioned that job cuts should be expected and the airline will likely “modestly” reduce its flight schedule.
American, which was founded in 1930, was formerly the country’s largest airline, but has fallen to third place behind United and Delta in recent years.
Sign up for THR news straight to your inbox every day