American Airlines has filed for Chapter 11 bankruptcy protection and announced that its president, Thomas Horton, has succeeded Gerard Arpey as chief executive.
The carrier today filed voluntary petitions for reorganisation with the Southern District of New York bankruptcy court, citing the move as being "in the best interest of the company and its stakeholders".
Horton said: "We have met our challenges head on, taking all possible action to secure our long-term position. In recent years, even as the airline industry faced unprecedented challenges, American strengthened our domestic and global network; fortified our alliances with the best partners around the world; launched a transformational fleet deal that will give American the youngest and most efficient fleet in the industry; and invested in our product, service and technology to build a world class customer experience.
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"But as we have made clear with increasing urgency in recent weeks, we must address our cost structure, including labour costs, to enable us to capitalise on these foundational strengths and secure our future. Our very substantial cost disadvantage compared to our larger competitors, all of which restructured their costs and debt through Chapter 11, has become increasingly untenable given the accelerating impact of global economic uncertainty and resulting revenue instability, volatile and rising fuel prices, and intensifying competitive challenges."
Horton added that the carrier is committed to working "as quickly and efficiently as possible" to restructure the airline and emerge from bankruptcy protection.
American intends to carry out its operations as normal during its restructuring process, and will "maintain a strong presence in domestic and international markets, including our cornerstones in Dallas Fort Worth, Chicago, New York, Miami and Los Angeles", said Horton.
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American will enter negotiations with its unions aimed at improving its cost structure.
The airline has $4.1 billion in unrestricted cash reserves and short-term investments, which it said will be "more than sufficient to assure that its vendors, suppliers and other business partners will be paid timely and in full for goods and services provided during the Chapter 11 process".