American Airlines Fails To Make A Deal

: Chris Lee Law Firm

  Filed under: News

american airlines bankruptcyOn the verge of Texas bankruptcy court, the nation’s largest airline has been working to resolve financial issues causing them to continually bleed red ink. One of the airline’s biggest strategies is to secure a deal with pilots, who are negotiating more favorable contract terms. After months in negotiations a deal has yet to be reached, leaving the airline reviewing other options, including bankruptcy.


Spinning Wheels

As American Airlines stock continues to plummet each week, the company has seen nearly a 75 percent drop in share values. As a result, company employees are being forced into concessions. Union workers have agreed to a $1.6 billion in contract concessions annually. However, even a drop in employee demands has yet to alleviate airline officials concerns about whether or not they have the cash to get through the upcoming holiday travel season.

American Airlines boasts one of the largest labor costs per airline than any other company in the industry. Rising fuel costs and a drop in ticket purchases have pushed the airline already into steep expense cuts. For years the airline has increased fees, began charging for surplus expenses and eliminated costs of complimentary food and beverages during flights in order to keep finances in the black. Despite all of these efforts, airline officials can no longer deny the possibility of an impending bankruptcy to protect company operations.




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