30 Nov 2011

American Airlines applies for Chapter 11

6:01 am on 30 November 2011

bankruptcy protection in New York.

The parent company of American Airlines, AMR, has filed for Chapter 11

bankruptcy protection in New York.

The action will allow the airline to continue normal business operations while its debt is restructured.

AA was the only major American airline not to file for bankruptcy after the September 11 terrorist attacks.

Unlike other airlines in the United States, it has not returned to profit in the last two years.

AMR said labour rules forced it to spend $US600 million more than other airlines on employee costs.

Shares of AMR have tumbled 45% since the end of September. Last week they reached their lowest level since 2003.

The airline said last month that its costs were up 40% in the third quarter compared with a year earlier, due to fuel prices.

Under its Chapter 11 bankruptcy filing in a New York court, the company listed assets of $US24.72 billion and liabilities of $US29.55 billion. The company said it has $US4.1 billion in cash.

AMR on Tuesday named Thomas Horton as chairman and chief executive, replacing Gerard Arpey, who retired.

Mr Horton says he will reshape American Airlines to be more efficient, financially stronger and competitive.