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Another airline bankruptcy ... finally

  • Blog Post by: Eric Wieffering
  • November 29, 2011 - 9:08 AM

Back in the early- to mid-2000s, when it seemed every airline was filing for bankruptcy (and some twice), American Airlines held out as the only legacy carrier to stay out of Chapter 11.

But the years have not been kind to the former king of the sky. Competitors like United Air Lines and Delta used bankruptcy to get rid of inefficient planes and slash labor costs, and then got bigger via mergers with, respectively, Continental and Northwest, which also lowered their costs through bankruptcy.

That left American as the smaller, higher cost alternative. Not a sustainable position, and AMR has lost money each of the last three years..

This reorganization may have been long delayed, but it was ultimately inevitable. 

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