American Airlines and its parent company, AMR Corp., are filing for chapter 11 bankruptcy, citing massive debt built up by years of high fuel prices and labor struggles. The motion will have no effect on current travelers, and AMR said its subsidiaries will honor all tickets and reservations during the bankruptcy filing process. CEO Gerard Arpey will step down, to be succeeded by company president Thomas W. Horton.
American Airlines has been seen as the weakest for some time, reporting a profit in only one quarter since 2007. Following the September 11 attacks in 2001, it was the only major airline that didn’t file for bankruptcy protection. According to Horton, a number of factors contributed to the decision, such as labor-contract negotiations with pilots and other workers, volatile fuel prices and a weak global economy.
