American Airlines and its parent company are filing for Chapter 11, finally joining the other major U.S. airlines who earlier sought bankruptcy protection.
The Financial Times says that in the last decade American watched its competitors use Chapter 11 to shed pension plans and reduce structural costs, leaving the third-largest U.S. carrier at a substantial disadvantage. American has continued to lose money while other airlines returned to profitability in the last two years.
CEO Gerard Arpey has stepped down and has been replaced by American’s president, Tom Horton.
For now, anyway, the bankruptcy filing is not expected to affect flight operations.