American Airlines files for bankruptcy with USD 29 billion debt

American Airlines' parent company the AMR Corporation will seek bankruptcy protection under Chapter 11 reorganization in the US Bankruptcy Court for the Southern District of New York, the company said in a statement to the press.

The company is the last major US carrier to file for Chapter 11. According to a statement, from AMR’s CEO Gerard Arpey and company president Thomas Horton, the move was made “To achieve a cost and debt structure that is industry competitive and thereby assure its long-term viability.” AMR’s management has opted for Chapter 11- in line with other US airlines- as it allows the company to continue operating as normal while restructuring debts. The statement also says flights are running to schedule and that the company expects to maintain normal services and honor obligations to customers, partners, contractors, suppliers and employees. However, the statement does not guarantee these obligations and makes no mention of compensation if the company is unable to continue as normal. According to a filing with the federal bankruptcy court in Manhattan AMR had USD29.6 billion in debt and USD24.7 billion in assets on September 30, 2011. AMR also claims to have in the region of USD4.1 billion in cash and short term investments available to cover operational costs. Liam Lever, liam@romania-insider.com (photo source: American Airlines)