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    American Airlines files for Ch. 11 protection

    FORT WORTH, Texas (AP) — American Airlines' parent company is seeking Chapter 11 bankruptcy protection as it seeks to unload massive debt built up by years of accelerating jet fuel prices and labor struggles.

    The nation's third largest airline also said its CEO Gerard Arpey will step down. He's being replaced by Thomas Horton, currently the company's president.

    Fort Worth, Texas-based AMR Corp., along with its regional affiliate AMR Eagle Holding Corp. said Tuesday that they filed voluntary petitions to reorganize.

    American says it sought protection to reduce its costs and debt to remain competitive.

    The airline says it will continue normal flight operations during the reorganization.

    American was the only major U.S. airline that didn't file for bankruptcy protection after the 2001 terrorist attacks. The last major airline to file for bankruptcy protection was Delta in 2005.

    American says labor-contract rules force it to spend at least $600 million more than other airlines.

    Besides higher labor costs, American also struggled with rising jet fuel costs. Jet fuel cost an average of $3 per gallon so far this year — a record according to government data that goes back to 1990. Jet fuel is more expensive now than the average of $2.96 per gallon in 2008, when oil rose above $147 per barrel for the first time. It's risen 56.4 percent in the past five years. The average price of jet fuel was $1.92 per gallon in 2006.

    American lost $162 million in the third quarter and has lost money in 14 of the last 16 quarters.

     

    1,123 comments

    • MR.G  •  Baltimore, United States  •  5 mths ago
      We the American People are tapped out and can't bail this one out.
      • David 5 mths ago
        Chapter 11 isn't the taxpayer bailing them out...it's their investors bailing them out (or at least prevented from getting paid for now...). It's old school stuff.
      • KoT 5 mths ago
        We the American People CANNOT stomach (nor afford) another predatory union destroying another business!
      • Togethor We Can 5 mths ago
        Who do you think the investors are? Its the people around the world and 401ks that bought this garbage.
    • beau10  •  5 mths ago
      You mean those outrageously high fees for everything didn't provide any profit??
      • Gary H 5 mths ago
        Hey hey hey, just slow down here for a moment, how about the poor CEO's, they need to make their respective projected salary increases..what do you think this is anyway ....
      • 458Italia 5 mths ago
        All those outrageous fees were/are an attempt to make up for the increased fuel costs, but it obviously wasn't enough.
      • BTS 5 mths ago
        You mean outrageous labor fees and benefits?
    • David  •  5 mths ago
      Jet fuel has set the record high this year at a whopping $3 a gallon? I need to start using jet fuel in my car, so I can save 40Cents a gallon.
      (And before all you "Dr. Sheldon Coopers" of the NASCAR World pipe in, I know my Hyundai can't handle it.)
      • Fred B 5 mths ago
        AA is getting their jet fuel at a bargain for $3 a gallon. At my local airport this past summer, jet fuel was $5.85 a gallon
      • DAVID 5 mths ago
        LMAO!
      • Traci 5 mths ago
        ROFL!...
    • AngryIndependent  •  Urbandale, United States  •  5 mths ago
      A corporation--a "person" now, according to the Supreme Court--can file for bankruptcy and still keep its business. In 2005, however, Congress made it so people can't file for bankruptcy and still keep their houses. Both are "people," but one gets preferential treatment. It's time to do away with every, single politician in this country. Take THEIR jobs away. Vote for anybody on the ballot but the Democrats and Republicans, or write in your vote.
      • Oliver Klozoff 5 mths ago
        GREAT IDEA!!! let's put 100,000 people on unemployment too!
      • USA 5 mths ago
        The difference between these two people is that one create jobs an pays taxes twice!
      • Carl 5 mths ago
        No, it shows whom really runs our Giveamint !!! Big Business !!!!!
    • yahoo user  •  5 mths ago
      If the economy is getting better like so many news media says it is why are they filing for Chapter 11 protection?
      • JS 5 mths ago
        greed, they don't feel like paying their bills!
      • KC 5 mths ago
        Because mgmt. likes their money and won't sacrifice for the good of the company.
      • Daniel 5 mths ago
        Because "The Economy" is code for Wall Street. And Wall Street hates pensions.
    • Oops! Try again.  •  Columbus, United States  •  5 mths ago
      "The CEO of the company that runs American Airlines received compensation valued at more than $5.2 million last year, an 11 percent increase over 2009, according to an Associated Press analysis of a regulatory filing on Thursday." - AP, April 2011.................GOOD JOB!!!
    • Emotionally Erect  •  5 mths ago
      I'd be interested to learn what Mr. Arpey's severance package will be...
    • Thameris  •  5 mths ago
      Bet they paid out some big bonus checks for failure to perform.
    • Nobama in 2012  •  Reston, United States  •  5 mths ago
      They can't blame it on "acclerating fuel prices." Other airlines buy fuel also. Try pisk poor management.
    • We the People!  •  5 mths ago
      OK watch what happens...the lawyers will make millions, the CEO will make millions..the workers will lose pension and benefits...and jobs will go...as usual the work force will get "shafted".
    • Lewis  •  Bellevue, United States  •  5 mths ago
      I wonder how much the outgoing CEO will get in his compensation package?
    • yankee123  •  5 mths ago
      14 quarters of losing money tells us this company is more likely to go out of business
      than remain in it. The CEO and President should both be forced to resign.
    • William  •  Elmhurst, United States  •  5 mths ago
      Mismanagement
    • Bass T Puckster  •  5 mths ago
      They lost 470 million in 2010 and yet Aprey was paid 5.1 million. All other Airlines posted profits.
    • 3MTA3  •  Little Rock, United States  •  5 mths ago
      "American was the only major U.S. airline that didn't file for bankruptcy protection after the 2001 terrorist attacks. The last major airline to file for bankruptcy protection was Delta in 2005."

      Guess the AP has never heard of Southwest Airlines.
    • stardog  •  Sacramento, United States  •  5 mths ago
      Well,there goes more middle class jobs down the toilet.
    • P-38  •  Wenzhou, China  •  5 mths ago
      While I would not wish ANY US company right now any ill will, I would point out that this company with the word AMERICAN in the name, signed a contract to buy 260 Airbus foreign company, airplanes and a fewer number from the US manufacturer Boeing.
    • Joe  •  Union, United States  •  5 mths ago
      I cant find a job can i too file for a bail out?
    • RodgerRabbit  •  Dallas, United States  •  5 mths ago
      Absolutely false claims in this story. Southwest Airlines didn't file bankruptcy after 9-11.... and they still make a profit every year. Hate to hear this about AMR... but, they'll spring back.
    • Tracy  •  5 mths ago
      wait, when I go bankrupt I loose everything so how is it they stay open for business and just cancel there debts.
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