Sharks Circling American Airlines In Bankruptcy

There  has been much attention over the fate of American Airlines after their announcement of filing Chapter 11 just a few short months ago. After several rounds of employee layoffs and several flight cuts, news broke about the airline bankruptcy plans for hiring expensive financial advisors. Just as we thought things couldn’t surprise us again, now there is big talk of a potential buyout and the end of an independently operating airline.

Vulnerable Prey

With so much on the line, American Airlines stands to lose a great deal if they are bought out or sold for parts in a bankruptcy buyout. Two of the biggest predators at the moment are US Airways and Delta, both which stand to gain a huge chunk of market share if they succeed in acquiring the industry giant. Delta would be able to take control of 35 percent of the market, while US Airways would increase to a 23 percent market share in a possible deal.

However, industry analysts are hoping the buyout talks are just that. Having big name financial experts behind them and the advantage of knowing other big airlines have made it out of bankruptcy, American does have a good chance to reinvent itself and exit bankruptcy.  However, this won’t come about unless there are deeper labor cuts, big management changes and successful negotiations with creditors.