American Airlines said its parent company has filed for Chapter 11 bankruptcy reorganization.
Fort Worth, Texas-based AMR Corp., the parent company of American Airlines and American Eagle, filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York, the airline said.
"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," Thomas Horton, chairman, CEO and president of AMR and American Airlines, said in a news release.
Horton asserted that the airline has taken "all possible action to secure our long-term position" in the face of "unprecedented challenges" in the industry. He said American has upgraded its fleet and strengthened its alliances with other carriers around the world.
AMR noted that it has approximately $4.1 billion in unrestricted cash and short-term investments.
"This cash, as well as cash generated from operations, is anticipated to 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 in accordance with customary terms," the company said in a news release. "Because of the company's current cash position, the need for debtor-in-possession financing is neither considered necessary nor anticipated."
The airline emphasized that it is "flying normal schedules and conducting business as usual worldwide" during the Chapter 11 process.