American Airlines Parent Files For Chapter 11 Protection
7:16 AM ET 11/29/11 | Dow Jones
DOW JONES NEWSWIRES
AMR Corp. (AMR), the parent company of American Airlines Inc., filed for Chapter 11 bankruptcy in New York, a process that will allow the carrier to continue normal business operations as it restructures its debt.
The company also named Thomsas Horton as chairman and chief executive, succeeding Gerard Arpey, who will retire.
"This was a difficult decision, but it is the necessary and right path for us to take - and take now - to become a more efficient, financially stronger, and competitive airline," Horton said.
The company has about $4.1 billion in unrestricted cash and short-term investments, which is expected to be sufficient to pay vendors, suppliers and other business partners during the Chapter 11 process. AMR doesn't expect to need debtor-in-possession financing.
Last month, AMR said it swung to a third-quarter loss as it again suffered under surging fuel expenses, which have been a particularly acute challenge for AMR in recent quarters. For the latest period, the company said aircraft fuel expenses jumped 40% from a year earlier.
Earlier this fall, AMR repeatedly defended itself against speculation of an impending bankruptcy, and the company had stressed it has no plans to restructure in court. American Airlines was the only major carrier not to turn a profit last year and looks set for another full-year loss in 2011.
Shares plunged 60% to 64 cents premarket.
-By Lauren Pollock, Dow Jones Newswires; 212-416-2356; lauren.pollock@dowjones.com
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11-29-11 0716ET
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