American Airlines files Ch. 11 bankruptcy

Discussion in 'Other Aspects of Aviation Security' started by Lisa Simeone, Nov 29, 2011.

  1. Lisa Simeone

    Lisa Simeone Original Member

    Hope this is the right thread for this. And you all know more about what it ultimately means (if anything) than I do.

    American Airlines files Ch. 11 bankruptcy

  2. RB

    RB Founding Member

    This story is all over the news here in the Dallas area. Being reported is that business will continue as normal for the time being, all tickets and flights honored. News reports are also saying that the FF program will be unaffected but I question that. I have a couple hundred thousand miles banked and expect them to go away or be devalued in some form or fashion during the bankruptcy. Also hearing that downsizing is a first order of business. Guessing the MD-80 aircraft will be retired a bit faster than first planned along with fewer flights and a smaller workforce.
  3. nachtnebel

    nachtnebel Original Member

    too bad. I loved the MD80. very powerful getting up into the air, not like the more sluggish 737s. Probably a fuel pig...
    undoubtedly some of their losses were occasioned by TSA depressing pax traffic...
  4. Mike

    Mike Founding Member Coach

    None of the last 3 C-11 bankruptcies affect FF benefits. I really wouldn't worry about that.

    It happened with Pan Am's bankruptcy, but that was a Chapter 7 (liquidation), during which purchaser could cherry-pick what they wanted to buy out of the bankruptcy estate.
  5. RB

    RB Founding Member

    Not really worried. Next trip is to south Florida and will not be flying. Two days by auto and happy to do it.

    Thank you American Airlines for letting TSA assault your customers!
  6. RB

    RB Founding Member

    Just received an email for AA. They are confirming that FF and other pax benefit programs remain intact.

    In part:

  7. Fisher1949

    Fisher1949 Original Member Coach

    Got the same email. I assume by "lifetime", they mean the life of the airline, which at 20 cents a share looks to be running out.

    Expect a "Debtor in Possession" notice in the next month or two signalling the end of the old airline. This will enable them to shed their legacy costs and re-emerge as a new AA, except that the FF miles will likely evaporate along with their pension obligations and CBA's with the unions.
  8. N965VJ

    N965VJ Original Member

    There's a some speculation that Parker at US is licking his chops. That whole DL thing a few years ago was such fun. :rolleyes:
  9. Fisher1949

    Fisher1949 Original Member Coach

  10. Mike

    Mike Founding Member Coach

    It's not the major reason. AA is the only legacy airline that has not restructured in bankruptcy. DL, NW, UA, US have all done so since 9/11; CO did it earlier. AA needs to get its labor costs & work rules in order. Unions are great at providing lip service but lousy when it's time to ante up. Remember their motto when Eastern when belly up: Full pay to the last day. And they (and Eastern) got their last day.

    However, it certainly hasn't helped. Airline margins traditionally are very thin, and when your margins are thin or non-existent (I believe AA has only reported a profit for one quarter in the last 4 years), an abused customer base that reduces its flying is just another way to bleed red ink.

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