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American files for bankruptcy protection

Oneworld partner American Airlines has filed for Chapter 11 bankruptcy protection to shield it from its creditors while it restructures its debt.The airline said it expected to continue normal business operations throughout the reorganisation process.

In a statement issued this afternoon, the airline said it needed time to address its cost structure, including its labour costs which are higher than its competitors. “Our very substantial cost disadvantage compared to our larger competitors, all of which restructured their costs and debt through Chapter 11, has become increasingly untenable given the accelerating impact of global economic uncertainty and resulting revenue instability, volatile and rising fuel prices, and intensifying competitive challenges,” it said.

Chapter 11 allows a company to continue operating, giving it time to restructure. American’s competitors US Airways and United Airlines have both sought bankruptcy protection in the past.

American said it was continuing its normal flight schedule and would honour all tickets and reservations, refunds and exchanges. The airline’s frequent flyer programme AAdvantage would not be affected, it said.

“American’s customers are always our top priority and they can continue to depend on us for the safe, reliable travel and high quality service they know and expect from us,” said chairman, CEO and president Thomas W. Horton.

“American serves 260 airports in more than 50 countries and territories, and we are committed to maintaining a strong presence in worldwide markets. I am confident American will emerge even stronger as a global leader known for excellence and innovation, a travel partner customers seek out, and a carrier that serves communities throughout the world.”

By Linsey McNeill
Source: Travelmole

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