Big Changes In American Airlines Bankruptcy

The American Airlines bankruptcy case has been anything but under the radar. For over a year, there has been much discussion about the future of the company, criticism over strategic restructuring moves, and some steep losses for prior employees. However, as the company moves forward they are hopeful the big changes ahead are going to better position them for future success.

Picking Up The Pieces

In the last two weeks, notable changes have come through the wire on the future of American Airlines. A 43 percent jump in stock prices in a single day, and a 149 percent increase over the course of a few months have all shocked bondholders. The jump in stock value came as discussions for a merger with US Airways neared imminent. Despite any finalization of a merger deal, many industry analysts have spoken out about their belief it is inevitable. Seen as a better alternative than a standalone exit from Chapter 11, many investors have soaked up shares in anticipation of the case conclusion.

Now that American labor unions have publicly endorsed the idea of a merger any other outcome seems almost too risky for AMR. US Airways financial performance has already improved at the idea of a merger, which is only going to strengthen its own future success with the acquisition of American. Customer base for either airline is likely to suffer if the deal falls through, leaving huge gaps in the financial performance of both companies.