American Airlines Bankruptcy
November 29, 2011 by staff
American Airlines Bankruptcy, The bankruptcy of American Airlines means cutbacks at South Florida’s dominant air carrier, which has been a source of growth during dark times for the economy and the tourism industry.
Unable to cut costs enough to fend off creditors, American and its parent company, AMR Corp., filed for Chapter 11 protection Tuesday morning while it tries to lower its debt and reorganize its business. American is one of the five largest private employers in Miami-Dade County, with about 9,000 workers.
The filing triggered a flurry of paperwork sure to raise anxiety across South Florida’s large network of American employees and vendors. Foreign and domestic suppliers were instructed how to get on a list to collect money from American, and AMR said it plans to begin labor talks under the auspices of a federal bankruptcy court in New York.
Miami-Dade County is listed as being owed $25 million. American had been building the new North Terminal at Miami International Airport but the county took over the project amid financial turmoil and construction delays.
American executives emphasized passengers should not notice a difference, with reservations, frequent-flyer miles, and routes remaining untouched for the foreseeable future. AMR has about $4 billion cash in its coffers, which executives said should make the restructuring easier on operations.
“The No. 1 message we’re trying to get out to customers is you can book with us with confidence,’’ said Craig Kreeger, head of customer service for American.
Investors were rattled by the news, including the abrupt exit of CEO Gerard Arpey. AMR stock plunged almost 90 percent Tuesday morning, from about $1.60 a share to 26 cents.
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