The Economy

American Airlines Files for Chapter 11 Reorganization

Nov. 29, 2011

The airline noted that it has plenty of cash to '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.'

Josh Cable

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.

About the Author

Josh Cable | Former Senior Editor

Former Senior Editor Josh Cable covered innovation issues -- including trends and best practices in R&D, process improvement and product development. He also reported on the best practices of the most successful companies and executives in the world of transportation manufacturing, which encompasses the aerospace, automotive, rail and shipbuilding sectors.

Josh also led the IndustryWeek Manufacturing Hall of Fame, IW’s annual tribute to the most influential executives and thought leaders in U.S. manufacturing history.

Before joining IndustryWeek, Josh was the editor-in-chief of Penton Media’s Government Product News and Government Procurement. He also was an award-winning beat reporter for several small newspapers in Northeast Ohio.

Josh received his BFA in creative writing from Bowling Green University, and continued his professional development through course-work at Ohio University and Cuyahoga Community College.

A lifelong resident of the Buckeye State, Josh currently lives in the Tremont neighborhood of Cleveland. When the weather cooperates, you’ll find him riding his bike to work, exercising his green thumb in the backyard or playing ultimate Frisbee.