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American Airlines Files for Bankruptcy

American Airlines parent AMR Corp. (AMR) filed for bankruptcy after failing to secure cost-cutting labor agreements and sitting out a round of mergers that dropped it from the world’s largest airline to No. 3 in the U.S. With the filing, American became the final large U.S. full- fare airline to seek court protection from creditors. The Fort Worth, Texas-based company, which traces its roots to 1920s air- mail operations in the Midwest, listed $24.7 billion in assets and $29.6 billion in debt in… ( さらに...

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olseric 0
CO that is.
Then Bethune saved it I think.
Im new in flight aware
Bankruptcy does not mean American is going to disappear. Every US legacy carrier has been through bankruptcy since 9/11 except for American, some even more than once. Unfortunately that put American at a competitive disadvantage, since the other airlines had been able to cast aside much of their debt obligations. I would expect to see American emerge from bankruptcy a stronger airline.
Continental did not go through bankruptcy post-9/11.
No but it did go through it a few years back
I thought they went through Chapter 33- Chapter 11 three times!
Which is post 9/11...
Many good comments here, notably the recent ones from Mildred and Ken. It is apparent that Arpey & crew drug out the negotiations as long as they could feed from the trough, got all they could, and then dumped it in everybody's lap.There will be many suffer on account of that and the NEW? group will have to take what was handed to them and do the best they can. Hopefully it will be for the benefit of the Airline rather than their own pockets.
What's with you people criticizing "management" and their bonuses? Pure envy? You think you could be a "better manager"? These guys and gals in management walk a very tight rope, trying to make EVERYONE happy: shareholders, union and non-union employees, government and consumers with LIMITED resources. Not everyone is cut out for those positions and in order to attract the best talent, you need to create incentives, which go in line with the level of responsibility in the company. I respect all of you, fronline employees, who have to deal with all kinds of crap from us flyers, but at the end of the day, you go home and you can "disconnect" from your job and go do whatever it is you do (second job, school, family). Not so with management. And that is true for AA, any airline or any other large REGULATED company in the world. If you don't like it, go work for a mom and pop shop or start your own business, and then you can criticize whomever you feel you can outdo in management.
Jorge: I'll be the first to agree with you on the disconnect and going home from a job and done, while management is never really off, BUT, being from the old school, I always look at a salary level to compensate a person doing a job and a BONUS if that job is done exceptionally well, above the level expected. To boot, I always have an outside source verify numbers so that managers receiving those bonuses don't COOK THE BOOKS to get them. That being said, in AA's case or in some others, either tha performance level has been set way to low or there has not been an outside verification
Wayne,you being associated with airline operations and truck industry operations do you think there is a problem with the business model of many airlines or is it more of a management problem. As I wrote earlier in the string hauling cheap freight most of the time and gouging the rest of the time doesn't seem to work. Looks like you got to be a 100% budget carrier or become a premium carrier and only cater to those wanting frills and service.
Well, from the trucking standpoint, the decent shippers out there started going to a core carrier concept years ago in order to secure capacity, even if it meant paying above market rates in some cases and this led to some unwritten partnerships. This company has always been a niche carrier and we only have about 7 key customers that at any given time are producing about 90% of our gross revenue, plus 1 key brokerage. Now naturally, some of those customers have multiple locations but we pretty know what we are going to do when we open each day. Without these folks we would have not made it through the recession.

My personal opinion is that it is not so much management in the Airlines or any other public company as it is the shareholders. Most either have no idea or could care less what it takes daily to produce revenue, as long as they get it, AND, they want growth every year whether they expand or not. What I really feel is that the junk bond craze of the early 80's raped this country and tore it apart so some could make some money. I saw profitable corporations bought for nothing, split up, sold off, people put out of work and companies shut down for a tax write off that had been making a profit and paying taxes. Prior to that, corporations and companies were solid as a group, making money and people working. Greed is what is wrong with everything right now.

De regulation didn't really help in all this just coming at once but that wringing out had already taken place before the bond craze hit, but in a nutshell, everything nowadays is just a reaction and there is no planning at all. There may be some but the minute something changes in the market or government, everything is out the window.

This really didn't answer your question, but I think the correct answer is that there is not an easy answer. This is just wehere we are and have been and my personal opinion.
Lots of forces at work, no doubt.I do have this feeling that if the airlines are going to be the mass transit of choice for the masses then most will become budget airlines with a few niche airlines thrown in. Glad we sold our truck dealerships last month. I'm already sleeping better.
I would say you should be glad. I'm kinda thinking this truck line will sell by Jan 1 or early 1st quarter. My senior partner is aging and wants out of it bad but it is like a kid to her. I'm just drawing a paycheck for acting as elder statesman now and learning the younger bunch to handle the day to day but that is how it needs to be. I have enogh flexibility I can come and go as I please and cell phones and computers have made contact easy. If we sell, I may continue to put in my time depending on who buys it but then I may go to the house. I like to fly but I have lost my love for the recips hence I have no hankering for my own plane(sure can't afford a jet) but with the market astir like it is, and the medical, I have no idea how long I can keep up the big iron work. Guess we'll see.
My senior partner was 74 and I'm 64. Timing was right and the stars lined up. Never got to graduate to jets so I'm not spoiled. After the new year I'm gonna buy another Cessna (nee Columbia) 400. We had the first production plane but sold it when the elder couldn't medical. Good luck on that sale thing. You'll be happy except for losing all the paid perks. Being a paid employee for a short time though is just fine with me. Now it's all about time!!!
Well, you've only got me beat by a couple of years. I guess we'll see how it goes. I had been in this thing for awhile. Retired off the flight job a couple of years ago and got more involved here, but a plane is not in the cards here no more traveling than is done, so we'll just wait and see.
One thing is certain, the transportation industry as a whole is no walk in the park.
pdixonj 0
You're being premature...the airline's not dead, yet....
Hey Cal, try sleeping in a cold van all night and then fly a 14 hour duty day...the unions didn't cause this, management know, the same excuses by airlines , "Labor is the root cause.". Funny how when airlines brag about profits, they don't bother thanking the pilots, but as soon as managemet starts robbing the company with THEIR bonuses, its labor's fault. Don't worry though, the pilots at AA will find other flying jobs but not true for all those fancy Airline Execs...if you think that's not true, take a look at all the management sour pusses on the street. And yes, I did sleep in a cold van last night and reported for flight duty early this morning. And by the way, I didn't get into this business for the share holders...don't give a rat's $#@% about them.
I agree with Willard. All the ones we grew up with are gone. I did see a United 737 the other day with kinda both carriers paint on it. Add United to your list. Skyshirts has a link to fallen flags that are all the old airlines that are out of business. A cool list to remember.
No Jorge, you're doesn't risk their job every 6 months with a mandatory physical or checkride. There's a reason foreign countries are searching high and low for pilots and starting to pay big (and well-deserved) money for them. Pencil pushers and bean counters are the death of this industry. Cramming people like cattle in seats with no leg room is the idea of management, not pilots. The only reason the government doesn't intervene with these practices is because the politicians have had their shoes signed by airline management and are right about one thing though, those "managers" will be having sleepless nights because they of no use in the real world when the layoffs hit...too bad.
With theier size and service area, they may get by without a dance partner. However they go, they are going to have to take a lesson from Delta and make the employee's part of the process. If they come back into this thing with the same adversarial attitude toward their people that they have had, they won't make it. It was good they held off on filing bankruptcy but I don't think there was anything noble about it. It just kept things going so more bonus money could be collected.
Yazoo 0
I applaud AA for trying to make it without bankruptcy. Delta tried but finally caved. Delta with Northwest came out a stronger airline. AA can do that as well although they don't have the option of a good dance partner.
It will be painful for the employees to loose many of the benefits that they planned. Once they get all of the debt, leases and various contracts re-negotiated, they will be back. And probably stronger than ever.
AA has been f**king the industry for years. Ask any Braniff, Eastern, Pan Am or TWA about the knife scars in the back. How come ALPA is now on the hook for more than 600 million dollars, YES $600,000.000.00. I hope that all the grief they wished on the employees of the above companies are enjoyed by the present employees. I feel sorry for the survivors of those previous mentioned companies who now get the same treatment from AA. What was said about management getting the gold and the employees getting the shaft?
Bankruptcy was hidious at Delta. Some us said last one out turn off the lights. To think we're going to get a 40% pay increase in the new contract is crazy, That being said, you don't want to kill the goose that lays the golden egg, but it's ok to get all the gold you can. Delta is now the 800 pound gorilla in the room and it's time we started acting like it. The reorganization allowed us to be in a position we are. Manaegment is not my friend but with a full vote on the board of directors helps. Yes I am a PBGC guy and my dreams of the classic old Airline Pilot retirement had to change. Now I'm fighting for the young Pilots who will take my place. Our pilots are share holders of this company and finally we became business pilots as well as pilots, I believe we have a great future for now, I was the Strike Chairman for the Northeast area and will be again if needed. Being part of the solution for the Company is an asset. Just because your the CEO just means your the CEO , doesn't mean your smart. Just look at Leo Mullin and his minions. Could have gone better. American will hurt but emerge as a 800 poung gorilla. Management is still imoral with all there bonuses. American Pilots need to become part of managment with a me to clause!
It won't be pretty Jerry, and I think one prime difference will be in how the employees are looked at. While not perfect, Delta has always had a better track record with it's people than the other carriers. Whether enough old management departs AA to where there is an attitude change will remain to be seen.
if they quit paying the CEO double digit millions, they would have more money.
I am a gate agent for American Airlines. We have known this was coming. There was no "secrets" being held back. We saw this coming. All of us employees have been discussing this for over a year. We need AA would file before the year was over. We just didn't know the exact date this would happen. AA has held on for as long as they could since post 9/11 and now those funds just aren't really there. It's not just the unions, the pay, the gas guzzling MD-80's, etc. It's a combination of a lot of things. Yes our upper tier management team is money hungry and don't want to sacrifice any of their own money to help the company stay afloat like us front line employees have with our pay decreases and giving us vacation time, etc to help reduce cost post 9/11. We did this and we asked management to do the same, and they just put more money in their pockets. Remember the big controversial when we all took pay cuts and gave up vacation time and the upper management walked away with a HUGE bonus check? Our upper management is just greedy and they have ruined this company. Yes we have gas guzzling aircraft, but so do other legacy carriers. Delta still has those DC-9's and MD-88's flying around. US still has their 737 fleet flying around. And WN still has their 737-500's. Yes our work horse at AA is the MD-80's but they are being phased out for every one delivery of a new 737-800. And, with AA's order of state of the art more fuel efficient aircraft coming to us starting in 2013 we will be the most fuel efficient airline in the US. We have to make sacrifices to make an airline stay afloat, now it's time for us to merge with either B6, AS, or US to make us more competitive against DL and UA/CO. I would hope to merge with B6 and/or AS to help us secure both the east and west coast of the US.We already have VERY strong code sharing agreements with those airlines, so why not let them join us and make AA the best airline in the world that everyone wants to fly! However, there is one thing that AA lacks on their planes unlike most of the other legacy and LLC carriers in the Us and that is newer updated cabins with IFE systems and updated interiors. AA is still living in an old fashioned world, and it's time for AA to make some changes to that to stay competitive with the other local and national carriers. Yes we have wifi on some of our aircraft, but what carrier doesn't have that technology now. We need better IFE's on our domestic and international fleet. Hopefully with these new 460 new planes coming to us, they will step up their game and install better choices for their passengers to enjoy why flying on board our planes. Even DL has stepped up their game and is installing wifi on their regional aircraft, AA just offers cold nuts to our pax flying first class on our CRJ-700's. DL offers full hot meals in their regional aircraft first class! AA has some approving in that area as well! I know all of us at AA will be pulling together to watch our company rise back to the top. As we all say, we are proud to bare the name, American! Because that is who we are at AA! We are all American!
this is sharkey capitalism at it´s best. hope you will survive w/out much harm. of all u.s. carriers AA has always been my favorite.
Dear AAdvantage® Member,

As you may know, on Tuesday, November 29, American Airlines filed for reorganization under Chapter 11. We took this action as part of our efforts to secure our long-term success in delivering the highest standards in air travel. We are committed to meeting your travel needs with outstanding customer service and safety, and it will be business as usual at American throughout our reorganization process. More than 80,000 people at American appreciate your loyalty and look forward to continuing to serve you.

We want to assure you that your AAdvantage® miles are secure. The AAdvantage miles that you've earned are yours and will stay yours, subject to usual policies, until you choose to redeem them for a great award with us. Likewise, your elite qualifying miles and your elite status, including lifetime status granted under the Million MilerSM program is secure and remains intact. You will continue to earn miles through all our existing AAdvantage participating companies and you will be able to redeem those miles for the same great awards — flights, upgrades, car rentals and hotels just to name a few. And, throughout the coming year, we will be adding even more opportunities to earn miles, as well as new ways to redeem those miles.

American is honoring all tickets and reservations as usual, and making normal refunds and exchanges. And, we intend to maintain a strong presence in domestic and international markets. As we and all airlines routinely do, we will continue to evaluate our operations and service, assuring that our network is as efficient and productive as possible. Additionally, relationships with our oneworld Alliance and other codeshare partners are continuing to provide you with opportunities to earn and redeem miles for travel to hundreds of destinations worldwide, and we are honoring all tickets and reservations for travel on our partner airlines as usual. For information about American's reorganization process, please visit

Even more importantly, we remain committed to providing a superior customer experience with a focus on delivering what our customers value most — the newest fleet with our upcoming aircraft deliveries, network strength in the important cities of the world and world-class products, service and technology.

American Airlines has a proud history, and we will have a successful future. All of us on the American team thank you for your loyalty and we look forward to welcoming you aboard soon.


Maya Leibman
President — AAdvantage Loyalty Program
indy2001 0
Nobody said American is "passing away". United, Continental, Delta, and Northwest all filed for bankruptcy. And they are all still around, albeit in different form. The bankruptcy filing is to keep American flying.
canuck44 0
I just hope Wayne cashed his check yesterday.
yeah I did.LOL
Actually, I get mine when I sign out, so I had it with me when I left DFW Saturday and I cashed it Monday morning. I doubt with this that I'll be doing much over the next while, once they start their layoffs which will undoubtedly come. Then you can't never tell, they may not want to screw up their unemployment.LOL
canuck44 0
Good deal...since this was the parent company AMR, operations shouldn't change except for some rather pissed off people with their pensions screwed over and a shortage of left seat experience from all the guys that bailed when they felt it coming.

It also explains the "Suddenly Airbus Syndrome" announcement for all the new birds and will raise questions of the financing behind that announcement. The Trustee will take a hard look at that deal which was announced after the decision to declare Chapter 11 was taken. Whether that deal goes through will ultimately depend on what the Trustee recommends to the court.

Don't be surprised if Eagle gets spun off in favor of a deal with one of the regionals like Mesa.
Well, this was just crew hole talk but the consensus seems to be to Hold on to Eagle. That being said, Eagle management thinks they will retain AMR and expand if they were spun off. That will be interesting. All those early retirements may make more or could be less opportunities for guys like me. From what I was told the other day, those guys are going to stay in the loop as well, retainging computer access for flight log in and booking, the whole 9 yards. As long as they hand me that check at signout and it don't bounce, I guess I'll fly. You are correct in that it's hard to give up and it ain't like I'm digging ditches all day long. As far as the Airbus, those orders were announced before this and financing offered from overseas. I am sure the trustee will look at it but will come to the same conclusion that AMR did about the price and savings.
canuck44 0
Shades of Air Canada and the Mulroney government. How does the old expression go...oh, yes "Follow the Executives!"
If the airlines didn't treat people like cattle, maybe more people could fly. the majors are so concerned with fattening the bottom line, customer service has gone by the wayside. I don't want to be walking freight. As much as I enjoy watching and photographing 'planes, my travels will be by rail until the airlines wake up!

[This poster has been suspended.]

This should explain it quite clearly.
I don't think AA is going anywhere but this was inevitable labor issues and the fact that AA hasn't been turning a profit this was bound to happen at some point. I think will come through and end up being a better airline and with that I mean more efficient. I do wonder what this means for Eagle though but lets remember Delta went through the same thing and it's still around.
Sorry, shareholders, creditors, employees and retirees... After AMR sheds their owners, stiffs their creditors, busts their unions, and loots their pension funds, they'll emerge as a leaner, healthier competitor, with nothing intact but the upper tiers of management.

It was unsustainable, of course, and the unions wouldn't give an inch. Hope you can pay your rent with your hot, bitter tears.

I guess, unlike GM and Chrysler, the Democrats decided not to buy the company, screw the bondholders and give a bunch of it to the unions. Probably should have done this back in '08, guys.
God Bless America!!!!
hey Cal, we gave up 50% of sk, vc, pay & time in 2003.....
MGT still took generous bonuses for them selves..
"pull together, win together" was a farce.
I was sorry to leave in 2008 but I could do better retired.
Thanks, Mildred. The young turks here don't know what they are talking about.
Cal, the Unions at AA- as the ones at most of the other Legacy Carriers- have given and are giving far more than an inch. Historically, part of the concessions made by the Unions have been used to pay bonuses to the Management people for being smart enough to get them to make concessions!

An Airline isn't an automobile manufacturer. We need management to keep us all going in the same direction, for planning, etc.- but the Line People... Pilots, FA's, Maintenance, Agents.... are the ones who provide the product and define the Company. At the Car Factory Management sets up the Assembly lines, designs the product, assembles the raw materials... the workers bolt and weld the things together.

The Airline would be more analagous to a Hospital. The Hospital Management is necessary to bring things together and keep them running, but the real reason for the Hospital is the work of the Medical Staff. On this Staff there are Senior MD's who are very well compensated, Junior ones who make less, and Interns and Residents who receive very little Compensation. The young Interns are bright people who are there for the experience- the experience that will lead to good compensation later.

Not unlike the bright kid in the Right Seat of a Saab pulling down $18,000 p.a. He might love flying, but he probably wouldn't be there without the possibility of someday Commanding a 747 or 777 and earning a wage commensurate with the skills and responsibilities the job demands.

Before we get too involved in a Dumbing Down of the Airline Professions to save a buck or two, read the thread on AF 447.
Eastern, PanAm, Brannif, National, TWA, Northwest Orient, and now American. Seems like everything I grew up with is passing away.
Dont forget United too.
Check Skyshirts for a link to fallen flags,left side of page. There is a long list of carriers that are gone. Kinda fun to wear the shirts
I worked for America West Airlines and then Doug Parker with shareholders decided to purchase US Air which was bankrupt at the time. Labor cost was a huge factor to outsource the majority of below-wing ramp, cargo, etc. Except for Southwest, airlines nowadays are just shells of themselves and the name of an airline is just a name. The culture of the individual airline is vanishing which was the airline to begin with. It is very sad to see that AMR is going to have to merge with another major carrier in order to gain momentum and stay alive just like DL,NW,US,AW,UA,CO. AA's labor cost was way more than the norm due to union negotiation. It's nice to have a big paycheck, but the ultimate payoff is outsourcing for AA employees. It's very different for a company to pay someone $28.00/h vs $7.25/h for the very same job. Obviously this is one issue that will be on the table to discuss.
Well, at least Arpey is gone and that may help some.
I just hope the choice of airlines in the US doesn't become between Southwest and United. Consumers will suffer very much because of this, if AA dies, pilots I assume will have to get jobs at regionals, because Legacies aren't hiring. So unions and managing better get its act together, because everybody will suffer, and not to mention: Chicago, DFW, Miami and LAX. To be honest the competition has bad service, so AA can do it and come back...I hope so for the thousands it will affect. And the MD80s need to go, if it means cutting service.
Well, there will undoubtedly be some job cuts in all sectors. As far as merger, I see some talk here of it but nothing official is out about it. None of the legacy's did any merging until after they came out of bankruptcy.As far as the MD-80's, they are scheduled to go and this shouldn't affect future equipment orders. They will be stronger afterwards. What this means is that they will set back and do it as management sees fit rather than trying to negotiate. Sad, but that seems to be the American way anymore.
timed perfectly with managements HUGE bonus
My sister-in-law is a Flight Attendent on American Airlines in Forth Worth, Texas. I sure hope she doesn't lose her job over this.
Alex, she will be flying more hours, have less days off, less pay, & Vacation but she will have a job if she wishes to stay.
American will probably rate a full movie starring Alec Baldwin!!!
Kind of saw it coming. They've been trying to sell of Eagle for a while now and those old gas guzzling MD-80s don't help the situation. Still a shock.
Everyone even remotely involved takes the gas - no winners except the execs who will get huge bonuses for managing the bankrupcy and "rebirth" of the airline and of course the parasite lawyers. Unfortunely they will have learned nothing and will be back to business as usual as soon as they can. This will not be a wake up call because it will be everyone elses fault. At least Arpey is gone!
That's low old man.LOL
As a former Clipper Driver, maybe I can cheer up my AA Colleagues with the possibly that in about 20 years someone might make a really bad TV Series and call it "American."
Management and management. Yes indeed. As life time Platinum member, I remember the feeling
to fly AA in the 80's and part of 90's, when old man Grandall was in the steering wheel.
Then came G Arpey, nice eco friendly and breast cancer charity fellow. During his time
the fleet rusted to oooolllddd smoking, broken down shit and Arpey didn't know which one
to run? an airline or breast cancer charity, so neither one one functioned or succeed.
I just hope that now when G.A. ca concentrate to run Oneworld and charities, the new guy
has balls and brains to get AA to look like an airline. Could start from scheduling, that
flying f.e. from Chicago to S. American, other than AA cities, wouldn't take 18-14 hrs with
overnight in Lima, Bogota, Medellin etc. (now it takes).
There really has to be something seriously wrong with most of the airlines business model. They just keep doing the same stupid things over and over. Airline travel simply will not fit everyones budget if the airlines themselves are to stay in business. Hauling cheap freight 90% of the time and gouging the other 10% just doesn't seem like it works. Chapeter 11 is just a scheme to line some pockets and screw others. Your either broke or your not.
TWA55 0
The end is not yet here for American, but the writing may well be on the wall. Airlines run on a very slim profit margin with high operating costs and don't need much to push them over the edge. American Airlines may well be at the edge without some major help, along with corrective actions which will hurt hundreds if not thousands.
One thing is for sure, don't expect a bailout from tax payers. This is the industry, 33 billion in loses since the whole airline thing started, It is a bad venture and I am willing to bet that even United,and others are not sleeping well at night. I wish you luck, but don't go down with the ship, it is not worth it, I know.
olseric 0
No, back in the (early?) 90's they went through it though.
Another example of Corporate America at its best.
Most upper management will take their multi million packages and run. Corporate America at its best.


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