The parent company of American Airlines filed for bankruptcy protection Tuesday,seeking relief from crushing debt caused by high fuel prices and expensive labour contracts that its competitors shed years ago. The company also replaced its CEO,and the incoming leader said American would probably cut its flight schedule modestly while it reorganises. The new CEO,Thomas W Horton,did not give specifics. For most travellers,though,flights will operate normally and the airline will honour tickets and take reservations. American said its frequent-flier programme would be unaffected. AMR Corp,which owns American,was one of the last major US airline companies that had avoided bankruptcy. Rivals United and Delta used bankruptcy to shed costly labour contracts,reduce debt,and start making money again. They also grew through mergers. American the nations third-largest airline and proud of an 80-year history was stuck with higher costs that meant it lost money when matching competitors lower fares. In announcing the bankruptcy filing,AMR said that Gerard Arpey,53,a veteran of the company for almost three decades and CEO since 2003,had retired and was replaced by Horton,50,the company president. Horton said the board of directors unanimously decided on Monday night to file for bankruptcy. In a filing with federal bankruptcy court in New York,AMR said it had $29.6 billion in debt and $24.7 billion in assets. With reductions to the flight schedule,Horton said there would probably be corresponding job cuts. American has about 78,000 employees and serves 240,000 passengers per day. AMRs move could also trigger more consolidation in the airline industry. Some analysts believe American is likely to merge with US Airways to move closer to United Continental Holdings Inc and Delta Air Lines Inc in size.
