JOC Staff | Nov 29, 2011 8:30AM EST
The parent of American Airlines, the nation’s third-largest airline, filed for Chapter 11 bankruptcy protection on Tuesday and began an overhaul of its management, labor relations and operations.
AMR said it would continue normal flight operations at American and American Eagle as it seeks to reduce costs. At the same time, CEO Gerard Arpey stepped down and AMR said he will be replaced by the company’s president, Thomas Horton.
AA Cargo is the third-largest cargo carrier among passenger airlines in the United States and produced $532 million in revenue in the first nine months of 2011.
The Dallas-based airline lost $884 million in the first three quarters of this year and has posted losses in 14 of the last 16 quarters. American has seen its finances deteriorate under soaring fuel costs and organized labor agreements AMR says force some $600 million in extra costs on the carrier beyond the costs of other U.S. airlines.
American was the only major U.S. airline outside domestic-only Southwest Airlines to avoid bankruptcy protection in the wake of the September 11 terror attacks. Those competitors have redrawn labor pacts under Chapter 11, and larger mergers in recent years have led to consolidated operations and lower operating costs.
