American Airlines parent files for bankruptcy
Reward scheme continues to operate
The parent company of American Airlines and American Eagle has filed for voluntary Chapter 11 bankruptcy.
American Airlines was the first carrier to introduce a frequent flyer programme and it says Its AAdvantage rewards scheme is continuing to operate.
AMR Corporation said the bankruptcy move had been made to achieve a cost and debt structure that is industry competitive and to assure its long-term viability and ability “to continue delivering a world-class travel experience for its customers.”
Amercian Airlines has been a major innovator in airline customer initiatives. It was the first carrier to offer curbside check-in, and the first to offer computerised reservations. It also developed deeply discounted Super Saver fare to fill empty seats on its planes.
However, it has run a costly operation with high wage costs, planes that are high on fuel consumption, and has not forged merger agreements like several of its airline competitors.
AMR said that the Chapter 11 process enables American Airlines and American Eagle to continue conducting normal business operations while they restructure their debt, costs and other obligations.
It aadded the two airlines are continuing to operate normal flight schedules, and their reservations, customer service, AAdvantage programme, Admirals Clubs and all other operations are conducting business as usual.
During the Chapter 11 process, American and American Eagle say they expect to continue to:
• Provide safe and reliable service
• Fly normal schedules
• Honor tickets and reservations, and make exchanges and refunds as usual
• Fully maintain AAdvantage frequent flyer and other customer service programs, and ensure all AAdvantage miles and elites status earned by members remain secure and intact
• Provide Admirals Club access and similar amenities to members and eligible customers;
• Remain an integral member of the oneworld alliance, of which American is a founding member, and continue its codeshare partnerships
• Provide employee wages, healthcare coverage, vacation, and other benefits, without interruption
• Pay suppliers for goods and services received during the reorganization process
AMR said that the filings have no direct legal impact on American’s operations outside the United States.
Thomas Horton, Chairman, CEO and president of AMR and American Airlines, 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.”