American Airlines bankruptcy does not affect ticket holders

American Airlines aircraft

Holiday travelers booked on American Airlines should not worry about AMR's bankruptcy. Image from Wikimedia Commons.

The parent company of American Airlines, one of the biggest air travel providers in the world, recently filed for bankruptcy. Ticket holders should rest assured that it won’t likely affect them.

American Airlines parent files for bankruptcy

The AMR Corporation, the parent company of American Airlines, recently filed for bankruptcy protection, according to MSNBC. The company has been struggling with debt and losses and is in dire need of reorganization.

The past few years have not been kind to AMR, according to USA Today. The company reported losing $2.1 billion in 2008, $1.5 billion in 2009 and $471 million in 2010. The AMR share price dropped from $7.92 in January to $1.61 on Nov. 23. According to MSNBC, the company reported a $162 million loss for the last quarter and listed $24.72 billion in assets and $29.55 billion in liabilities in its bankruptcy filing, along with $4.1 billion in cash. The company owns American Airlines along with American Eagle Airlines, among others.

Holiday travelers should not worry

Holiday travelers, according to CNN, should be reassured that it will be “business as usual” for the time being, the company said. All scheduled flights are confirmed and ticket reservations will be honored.

The company will also honor agreements with members of AAdvantage Loyalty Program. Members will still be eligible for all their loyalty miles and perks; there won’t be any additional restrictions on use of AAdvantage miles. Frequent flyer miles garnered by use of a rewards credit card can still be used.

According to Daily Finance, customers who belong to the  “Admiral’s Club” will also still be entitled to any benefits pertaining to membership.

Various analysts are predicting that there will be lower fares throughout the holidays as the company tries to boost revenue.

Nothing new For Air industry

AMR, and by extension American Airlines, is not the first airline to enter bankruptcy protection for reorganization and discharging debts. According to CNN, Delta, United, Northwest and U.S. Airways have all filed for Chapter 11 protection within the past 10 years and continued to operate.

It is likely, according to various analysts quoted by CNN, USA Today and others, that there will be a reduction in staff. Service to some areas, especially the more remote and less profitable routes, may be reduced or cut.



USA Today


Daily Finance

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