AMR filing Chapter 11 today...

Discussion in 'American Airlines | AAdvantage' started by pdb, Nov 29, 2011.  |  Print Topic

  1. pdb

    pdb Silver Member

    Messages:
    19
    Likes Received:
    25
    Status Points:
    145
    ...per CNBC
     
  2. canucklehead
    Original Member

    canucklehead Gold Member

    Messages:
    5,895
    Likes Received:
    22,059
    Status Points:
    11,070
    pdb, welcome to MP!

    and per the thread - it seemed inevitable, but WOW!
     
    rwoman and zpaul like this.
  3. dhammer53
    Original Member

    dhammer53 Gold Member

    Messages:
    1,574
    Likes Received:
    2,928
    Status Points:
    1,470
    Just heard the news. Should be an interesting day here.
     
    SC Flier, rwoman and zpaul like this.
  4. Titans26

    Titans26 Silver Member

    Messages:
    1,515
    Likes Received:
    1,019
    Status Points:
    875
    jmrich1432, rwoman and zpaul like this.
  5. NYBanker
    Original Member

    NYBanker Gold Member

    Messages:
    32,725
    Likes Received:
    191,901
    Status Points:
    20,020
    WSJ has same story now. Hmmm...

    Bad news for employees, shareholders and airplane lessors...

    My suspicion is little impact on pax.
     
  6. HeathrowGuy
    Original Member

    HeathrowGuy Gold Member

    Messages:
    7,131
    Likes Received:
    10,591
    Status Points:
    12,520
    AMR and American Airlines File for Chapter 11 Reorganization to Achieve Industry Competitiveness
    American Airlines, American Eagle and All Other Subsidiaries Operating Normal Flight Schedules, Honoring All Tickets and Reservations, Maintaining High Customer Service Levels and AAdvantage Program, and Continuing Employee Pay and Benefits
    AMR Has $4.1 Billion in Cash to Ensure Uninterrupted Supply of Goods and Services During Proceedings

    Press Release: AMR Corporation; American Airlines

    FORT WORTH, Texas , Nov. 29, 2011 /PRNewswire/ -- AMR Corporation ("the Company"), the parent company of American Airlines, Inc. ("American") and AMR Eagle Holding Corporation ("American Eagle"), announced that in order to achieve a cost and debt structure that is industry competitive and thereby assure its long-term viability and ability to continue delivering a world-class travel experience for its customers, the Company and certain of its U.S.-based subsidiaries (including American and American Eagle), today filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York .

    AMR's Board of Directors determined that a Chapter 11 reorganization is in the best interest of the Company and its stakeholders. Just as with the Company's major airline competitors in recent years, the Chapter 11 process enables American Airlines and American Eagle to continue conducting normal business operations while they restructure their debt, costs and other obligations.

    American Airlines and American Eagle are operating normal flight schedules today, and their reservations, customer service, AAdvantage® program, Admirals Clubs and all other operations are conducting business as usual. Likewise, throughout the Chapter 11 process, American and American Eagle expect to continue to:

    Provide safe and reliable service;
    Fly normal schedules;
    Honor tickets and reservations, and make exchanges and refunds as usual;
    Fully maintain AAdvantage frequent flyer and other customer service programs, and ensure all AAdvantage miles and elites status earned by members remain secure and intact;
    Provide Admirals Club access and similar amenities to members and eligible customers;
    Remain an integral member of the oneworld® alliance, of which American is a founding member, and continue its codeshare partnerships;
    Provide employee wages, healthcare coverage, vacation, and other benefits, without interruption; and
    Pay suppliers for goods and services received during the reorganization process.

    These filings have no direct legal impact on American's operations outside the United States .

    Thomas W. Horton , Chairman, Chief Executive Officer and President of AMR and American Airlines, said, "This was a difficult decision, but it is the necessary and right path for us to take - and take now - to become a more efficient, financially stronger, and competitive airline.

    "We have met our challenges head on, taking all possible action to secure our long-term position. In recent years, even as the airline industry faced unprecedented challenges, American strengthened our domestic and global network; fortified our alliances with the best partners around the world; launched a transformational fleet deal that will give American the youngest and most efficient fleet in the industry; and invested in our product, service and technology to build a world class customer experience.

    "But as we have made clear with increasing urgency in recent weeks, we must address our cost structure, including labor costs, to enable us to capitalize on these foundational strengths and secure our future. Our very substantial cost disadvantage compared to our larger competitors, all of which restructured their costs and debt through Chapter 11, has become increasingly untenable given the accelerating impact of global economic uncertainty and resulting revenue instability, volatile and rising fuel prices, and intensifying competitive challenges.

    "Our Board decided that it was necessary to take this step now to restore the Company's profitability, operating flexibility, and financial strength. We are committed to working as quickly and efficiently as possible to appropriately restructure American so that it can emerge from Chapter 11 well-positioned to assure the Company's long term viability and its ability to compete effectively in the marketplace," Horton stated.

    Horton continued, "Throughout the restructuring process, as always, our customers remain our top priority and they can continue to depend on us for the safe, reliable travel and high quality service they know and expect from us. We intend to maintain a strong presence in domestic and international markets, including our cornerstones in Dallas/Fort Worth , Chicago , New York , Miami and Los Angeles . As we and all airlines routinely do, we will continue to evaluate our operations and service, assuring that our network is as efficient and productive as possible.

    "Achieving the competitive cost structure we need remains a key imperative in this process and, as one part of that, we plan to initiate further negotiations with all of our unions to reduce our labor costs to competitive levels."

    "American Airlines has a strong, proud history and we will have a successful future. Working through this difficult, but necessary action and process, I am confident we will succeed in enhancing our reputation as a global leader known for excellence and innovation, a travel partner customers seek out, and a carrier that serves communities throughout the world," Horton concluded.

    The Company has approximately $4.1 billion in unrestricted cash and short-term investments. This cash, as well as cash generated from operations, is anticipated to be more than sufficient to assure that its vendors, suppliers and other business partners will be paid timely and in full for goods and services provided during the Chapter 11 process in accordance with customary terms.

    Because of the Company's current cash position, the need for debtor-in-possession financing is neither considered necessary nor anticipated.

    American is filing motions today with the Court seeking interim relief that will ensure the Company's continued ability to conduct normal operations, including the ability to:

    Provide employee wages, healthcare coverage, vacation, and other benefits without interruption;
    Honor pre-petition obligations to customers and continue customer programs including American's AAdvantage frequent flyer program;
    Pay for fuel under existing fuel supply contracts, and honor existing fuel supply, distribution and storage agreements; and
    Assume and honor contracts relating to interline agreements with other airlines.

    As announced separately today, the Board of Directors of AMR Corporation appointed Horton Chairman and Chief Executive Officer of the Company, succeeding Gerard Arpey , who informed the Board of his decision to retire. Horton will also succeed Arpey as Chairman and Chief Executive Officer of American Airlines and will retain the title of President.

    AMR's lead counsel is Weil, Gotshal & Manges LLP and its financial advisor is Rothschild, Inc.

    More information about American Airlines Chapter 11 filing is available on the Internet at AA.com/restructuring. Information for suppliers and vendors is available at (866) 736-9011 or (703) 286-2757, or by sending an email to amr.supplier@aa.com.

    AMR will be filing monthly operating reports with the Bankruptcy Court and also plans to post these monthly operating reports on the Investor Relations section of AA.com. The company will continue to file quarterly and annual reports with the Securities and Exchange Commission, which will also be available in the Investor Relations section of AA.com.
     
  7. HeathrowGuy
    Original Member

    HeathrowGuy Gold Member

    Messages:
    7,131
    Likes Received:
    10,591
    Status Points:
    12,520
    Good luck to AA, but the bankruptcy will NOT be easy for them. Unlike the early 2000s, AA's competitors are now sitting on tons of cash, and have the wherewithal and imperative to do everything possible to ensure AA does not emerge from BK protection in its current form.
     
  8. zpaul

    zpaul Gold Member

    Messages:
    1,071
    Likes Received:
    2,816
    Status Points:
    1,445
    I'm no economist or financial whiz, but it has been apparent that AMR had to do something, and soon. Based on other airlines' experience with Chapter 11 I hope the best comes of this (meaning that AA sticks around and makes the improvements necessary) but some have mentioned that there is a very different economic climate now from when UA and DL went into Chapter 11. I'll be reading everyone's thoughts with interest. Good luck, AMR!
     
  9. Eloy Fonseca Neto
    Original Member

    Eloy Fonseca Neto Silver Member

    Messages:
    843
    Likes Received:
    1,024
    Status Points:
    870
    And they don't want my money. Due to the MM stunt to begin after tomorrow I was ready to buy 300.000 miles for me and my family all together, froom us it would be about 9.000 USD, and if the date was set to begin a little late, me and my family would spend even more on the Mileage Multiplier on the Check-in Kiosks. After Dec 1st, they will get 0 USD. So much for trying and limiting access to a tier who has benefits that impacts nothing to them!!!
     
  10. zpaul

    zpaul Gold Member

    Messages:
    1,071
    Likes Received:
    2,816
    Status Points:
    1,445
    But you got PJs! ;)
     
  11. Kaanapali
    Original Member

    Kaanapali Gold Member

    Messages:
    71,234
    Likes Received:
    228,224
    Status Points:
    19,995
    http://aa.mediaroom.com/index.php?s=43&item=3397

    From the article:
    AMR and American Airlines File for Chapter 11 Reorganization to Achieve Industry Competitiveness

    American Airlines, American Eagle and All Other Subsidiaries Operating Normal Flight Schedules, Honoring All Tickets and Reservations, Maintaining High Customer Service Levels and AAdvantage Program, and Continuing Employee Pay and Benefits

    AMR Has $4.1 Billion in Cash to Ensure Uninterrupted Supply of Goods and Services During Proceedings

    FORT WORTH, Texas, Nov. 29, 2011 /PRNewswire/ -- AMR Corporation ("the Company"), the parent company of American Airlines, Inc. ("American") and AMR Eagle Holding Corporation ("American Eagle"), announced that in order to achieve a cost and debt structure that is industry competitive and thereby assure its long-term viability and ability to continue delivering a world-class travel experience for its customers, the Company and certain of its U.S.-based subsidiaries (including American and American Eagle), today filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York.

    AMR's Board of Directors determined that a Chapter 11 reorganization is in the best interest of the Company and its stakeholders. Just as with the Company's major airline competitors in recent years, the Chapter 11 process enables American Airlines and American Eagle to continue conducting normal business operations while they restructure their debt, costs and other obligations.

    American Airlines and American Eagle are operating normal flight schedules today, and their reservations, customer service, AAdvantage® program, Admirals Clubs and all other operations are conducting business as usual. Likewise, throughout the Chapter 11 process, American and American Eagle expect to continue to:
    • Provide safe and reliable service;
    • Fly normal schedules;
    • Honor tickets and reservations, and make exchanges and refunds as usual;
    • Fully maintain AAdvantage frequent flyer and other customer service programs, and ensure all AAdvantage miles and elites status earned by members remain secure and intact;
    • Provide Admirals Club access and similar amenities to members and eligible customers;
    • Remain an integral member of the oneworld® alliance, of which American is a founding member, and continue its codeshare partnerships;
    • Provide employee wages, healthcare coverage, vacation, and other benefits, without interruption; and
    • Pay suppliers for goods and services received during the reorganization process.

    These filings have no direct legal impact on American's operations outside the United States.
    Thomas W. Horton, Chairman, Chief Executive Officer and President of AMR and American Airlines, said, "This was a difficult decision, but it is the necessary and right path for us to take - and take now - to become a more efficient, financially stronger, and competitive airline.
    "We have met our challenges head on, taking all possible action to secure our long-term position. In recent years, even as the airline industry faced unprecedented challenges, American strengthened our domestic and global network; fortified our alliances with the best partners around the world; launched a transformational fleet deal that will give American the youngest and most efficient fleet in the industry; and invested in our product, service and technology to build a world class customer experience.

    "But as we have made clear with increasing urgency in recent weeks, we must address our cost structure, including labor costs, to enable us to capitalize on these foundational strengths and secure our future. Our very substantial cost disadvantage compared to our larger competitors, all of which restructured their costs and debt through Chapter 11, has become increasingly untenable given the accelerating impact of global economic uncertainty and resulting revenue instability, volatile and rising fuel prices, and intensifying competitive challenges.

    "Our Board decided that it was necessary to take this step now to restore the Company's profitability, operating flexibility, and financial strength. We are committed to working as quickly and efficiently as possible to appropriately restructure American so that it can emerge from Chapter 11 well-positioned to assure the Company's long term viability and its ability to compete effectively in the marketplace," Horton stated.

    Horton continued, "Throughout the restructuring process, as always, our customers remain our top priority and they can continue to depend on us for the safe, reliable travel and high quality service they know and expect from us. We intend to maintain a strong presence in domestic and international markets, including our cornerstones in Dallas/Fort Worth, Chicago, New York, Miami and Los Angeles. As we and all airlines routinely do, we will continue to evaluate our operations and service, assuring that our network is as efficient and productive as possible.

    "Achieving the competitive cost structure we need remains a key imperative in this process and, as one part of that, we plan to initiate further negotiations with all of our unions to reduce our labor costs to competitive levels."

    "American Airlines has a strong, proud history and we will have a successful future. Working through this difficult, but necessary action and process, I am confident we will succeed in enhancing our reputation as a global leader known for excellence and innovation, a travel partner customers seek out, and a carrier that serves communities throughout the world," Horton concluded.

    The Company has approximately $4.1 billion in unrestricted cash and short-term investments. This cash, as well as cash generated from operations, is anticipated to be more than sufficient to assure that its vendors, suppliers and other business partners will be paid timely and in full for goods and services provided during the Chapter 11 process in accordance with customary terms. Because of the Company's current cash position, the need for debtor-in-possession financing is neither considered necessary nor anticipated.
     
  12. Tenmoc
    Original Member

    Tenmoc Gold Member

    Messages:
    31,882
    Likes Received:
    212,880
    Status Points:
    20,020
    Going to be interesting. But I honestly do not fear for things from my point of view.
     
    LETTERBOY, canucklehead and zpaul like this.
  13. mrredskin
    Original Member

    mrredskin Gold Member

    Messages:
    1,422
    Likes Received:
    1,701
    Status Points:
    1,095
    exactly why some of us advised AGAINST buying their stock a couple months ago, despite it's low price. just because it's cheap, doesn't mean it will go back up
     
  14. sobore
    Original Member

    sobore Gold Member

    Messages:
    12,421
    Likes Received:
    33,847
    Status Points:
    16,520
    Let's hope so.
     
  15. Art234
    Original Member

    Art234 Milepoint Guide

    Messages:
    793
    Likes Received:
    931
    Status Points:
    795
    And hidden within the story is Arpey's decision to "retire"....which just doesn't seem voluntary. I think perhaps he was against filing and got outvoted....

    In any case not a good day if you work for AA or hold shares....I wonder how long it will take to decimate retirement plans.....

    Now if only they can keep Parker and his ego away......
     
  16. Eloy Fonseca Neto
    Original Member

    Eloy Fonseca Neto Silver Member

    Messages:
    843
    Likes Received:
    1,024
    Status Points:
    870
    That's right, at least I got PJs!!! :)
     
    Scottrick and zpaul like this.
  17. AmericanAirlines

    AmericanAirlines Official Representative

    Messages:
    120
    Likes Received:
    615
    Status Points:
    510
    Below is a letter that will be arriving throughout the day to AAdvantage members:

    Dear AAdvantage(R) Member,

    As you may know, on Tuesday, November 29, American Airlines filed for reorganization under Chapter 11. We took this action as part of our efforts to secure our long-term success in delivering the highest standards in air travel. We are committed to meeting your travel needs with outstanding customer service and safety, and it will be business as usual at American throughout our reorganization process. More than 80,000 people at American appreciate your loyalty and look forward to continuing to serve you.

    We want to assure you that your AAdvantage(R) miles are secure. The AAdvantage miles that you've earned are yours and will stay yours, subject to usual policies, until you choose to redeem them for a great award with us. Likewise, your elite qualifying miles and your elite status, including lifetime status granted under the Million Miler(SM) program is secure and remains intact. You will continue to earn miles through all our existing AAdvantage participating companies and you will be able to redeem those miles for the same great awards – flights, upgrades, car rentals and hotels just to name a few. And, throughout the coming year, we will be adding even more opportunities to earn miles, as well as new ways to redeem those miles.

    American is honoring all tickets and reservations as usual, and making normal refunds and exchanges. And, we intend to maintain a strong presence in domestic and international markets. As we and all airlines routinely do, we will continue to evaluate our operations and service, assuring that our network is as efficient and productive as possible. Additionally, relationships with our oneworld Alliance and other codeshare partners are continuing to provide you with opportunities to earn and redeem miles for travel to hundreds of destinations worldwide, and we are honoring all tickets and reservations for travel on our partner airlines as usual. For information about American's reorganization process, please visit AA.com/restructuring.

    Even more importantly, we remain committed to providing a superior customer experience with a focus on delivering what our customers value most – the newest fleet with our upcoming aircraft deliveries, network strength in the important cities of the world and world-class products, service and technology.

    American Airlines has a proud history, and we will have a successful future. All of us on the American team thank you for your loyalty and we look forward to welcoming you aboard soon.

    Sincerely,

    Maya Leibman
    President - AAdvantage Loyalty Program
     
  18. MLW20
    Original Member

    MLW20 Gold Member

    Messages:
    8,363
    Likes Received:
    4,911
    Status Points:
    6,545
    American Airlines files for Ch. 11 protection



    [​IMG]AP – 16 mins ago

    FORT WORTH, Texas (AP) — The parent companies of American Airlines and its regional affiliate American Eagle are filing for Ch. 11 bankruptcy protection.
    AMR Corp. and AMR Eagle Holding Corp. said Tuesday that they filed voluntary petitions to reorganize, saying it's in the best interest of the companies and its shareholders.
    American says it sought protection to reduce its costs and debt to remain competitive in the airline industry.
    American was the only major U.S. airline that didn't file for bankruptcy protection after the 2001 terrorist attacks.
    American says labor-contract rules force it to spend at least $600 million more than other airlines.
     
  19. newbluesea
    Original Member

    newbluesea Gold Member

    Messages:
    2,687
    Likes Received:
    4,743
    Status Points:
    2,570
    Yeah shame on them... just think your milage purchase would have prevented this Chap 11 mess.:rolleyes:

    Upside to all this? Perhaps we might hope (or be so lucky) not to hear you complain over and over on the same topics... pretty insignificant in the scope of things.:)
     
    LETTERBOY likes this.
  20. Tenmoc
    Original Member

    Tenmoc Gold Member

    Messages:
    31,882
    Likes Received:
    212,880
    Status Points:
    20,020
    Thank you Maya for posting the letter here.
     
    Jimgotkp, DCtrAAveler and zpaul like this.
  21. Photonerd71

    Photonerd71 Silver Member

    Messages:
    762
    Likes Received:
    973
    Status Points:
    770
    Not surprising sadly. But in the long run probably a good thing, it will allow them to get their house in better order.

    At least on here (so far anyway) most of the comments have been rational. They, AA, made this announcement on FB and most of the comments so far have been idiotic to say the least. (there was even on saying this was karma for the whole stupid cat thing). Adults here, idiot kids there.
     
  22. ceieoc

    ceieoc Silver Member

    Messages:
    195
    Likes Received:
    210
    Status Points:
    420
    I was hoping with Mr. Arpey "retiring" you might move up the corporate American Airlines ladder. When I viewed AA.com/restructuring it earlier today, is only said "test". As I was chugging my coffee, I thought, a test restructuring, how odd. Fortunately, the details of the AA restructuring are now viewable on the aa.com/restructuring web link.

    As you read this, take a one to five minute break and remember to breathe normally. I promise, the sun will rise over Dallas, Texas today. Let me be the first to welcome you and the world to the new American Airlines.
     
    Jimgotkp and zpaul like this.
  23. zpaul

    zpaul Gold Member

    Messages:
    1,071
    Likes Received:
    2,816
    Status Points:
    1,445
    Has anybody received any communication from AAdvantage? I would have expected them to have an email prepared and scheduled to go to members as soon as the news broke. Maybe it's going from the top down, as I'm kind of a bottom-feeder for now.

    No, I don't expect that it would tell us anything that we don't already know, but it seems like the right thing to do.
     
  24. Tenmoc
    Original Member

    Tenmoc Gold Member

    Messages:
    31,882
    Likes Received:
    212,880
    Status Points:
    20,020
    It is posted by Maya already in the other thread about them filing BK.

    http://milepoint.com/forums/threads/amr-and-aa-file-for-chapter-11-arpey-out.23041/
     
    zpaul likes this.
  25. AmericanAirlines

    AmericanAirlines Official Representative

    Messages:
    120
    Likes Received:
    615
    Status Points:
    510
    This is the letter that will be arriving throughout the day to AAdvantage members:

    Dear AAdvantage(R) Member,

    As you may know, on Tuesday, November 29, American Airlines filed for reorganization under Chapter 11. We took this action as part of our efforts to secure our long-term success in delivering the highest standards in air travel. We are committed to meeting your travel needs with outstanding customer service and safety, and it will be business as usual at American throughout our reorganization process. More than 80,000 people at American appreciate your loyalty and look forward to continuing to serve you.

    We want to assure you that your AAdvantage(R) miles are secure. The AAdvantage miles that you've earned are yours and will stay yours, subject to usual policies, until you choose to redeem them for a great award with us. Likewise, your elite qualifying miles and your elite status, including lifetime status granted under the Million Miler(SM) program is secure and remains intact. You will continue to earn miles through all our existing AAdvantage participating companies and you will be able to redeem those miles for the same great awards – flights, upgrades, car rentals and hotels just to name a few. And, throughout the coming year, we will be adding even more opportunities to earn miles, as well as new ways to redeem those miles.

    American is honoring all tickets and reservations as usual, and making normal refunds and exchanges. And, we intend to maintain a strong presence in domestic and international markets. As we and all airlines routinely do, we will continue to evaluate our operations and service, assuring that our network is as efficient and productive as possible. Additionally, relationships with our oneworld Alliance and other codeshare partners are continuing to provide you with opportunities to earn and redeem miles for travel to hundreds of destinations worldwide, and we are honoring all tickets and reservations for travel on our partner airlines as usual. For information about American's reorganization process, please visit AA.com/restructuring.

    Even more importantly, we remain committed to providing a superior customer experience with a focus on delivering what our customers value most – the newest fleet with our upcoming aircraft deliveries, network strength in the important cities of the world and world-class products, service and technology.

    American Airlines has a proud history, and we will have a successful future. All of us on the American team thank you for your loyalty and we look forward to welcoming you aboard soon.

    Sincerely,

    Maya Leibman
    President - AAdvantage Loyalty Program
     

Share This Page