American Airlines Files For Chapter 11
After years of profit loss and months of denying the inevitable bankruptcy filing, American Airlines has filed for Chapter 11 bankruptcy protection. While executives are left worrying about how the financial details will be reorganized, American Airline employees and customers are left wondering how they will be affected by the filing.
Big Shoes To Fill
The CEO of American Airlines retired shortly after the parent company board decided on filing for bankruptcy protection. Having not agreed with the need for bankruptcy, Gerald Arpey stepped down as current CEO of the nation’s largest airline company while the company works to resolve its financial troubles under the leadership of its president, Thomas Horton.
The main focus of the Chapter 11 case will be aimed at balancing debts owed to creditors while improving profitability. American Airlines has the most expensive labor and operating costs in the airline industry, which leaves many employees nervous about their future at the company. American has promised that current employees will not see any changes to their current contracts, including salary or benefits.
Soaring gas prices and overwhelming debt among many creditors has American customers concerned about their holiday travel plans. In the past, other airlines have cut frequent flyer miles, increased prices and added fees to combat their financial problems in bankruptcy. So far, American Airlines has not announced any changes to its plan for customers and is reassuring everyone that holiday travel plans will not be interrupted by the filing. While many promises are temporarily comforting, only time will tell if American can truly resolve it’s financial troubles without impacting employees and customers.