AMR Corporation and its two U.S. airline subsidiaries, American Airlines and American Eagle, filed for Chapter 11 bankruptcy today after failing to agree to cost-cutting measures with its pilots. The only major U.S. airline company to avoid bankruptcy over the past decade, AMR finally succumbed to pension funding burdens and high fuel costs while its main rivals shed labor costs under Chapter 11 and subsequently engaged in consolidation.
“We took this action in order to achieve a cost and debt structure that is industry competitive and thereby assure our long-term viability and ability to continue delivering a world-class travel experience for customers,” said the company in a statement. American Airlines and American Eagle will continue to operate normal flight schedules, maintain their frequent-flier programs, honor all employee wages and benefits and carry on with all their code-share relationships, it added.
