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American Airlines Files For Bankruptcy
We hope you used up those frequent flier miles which are now a General Unsecured Claim on thee company and will likely result in an exchange rate of 1 million miles for one round trip flight...
- AMR CORP. FILES BANKRUPTCY IN NEW YORK
- AMR, HOLDING COMPANY FOR AMERICAN AIRLINES, FILES CHAPTER 11
- AMR COPR. LISTS DEBTS OF $29.5 BILLION IN BANKRUPTCY FILING
- AMR HAS $4.1B IN CASH
- AMR TO START FURTHER TALKS WITH UNION TO CUT LABOR COSTS
- *AMR NAMES THOMAS HORTON CHAIRMAN, CEO; GERALD ARPEY TO RETIRE
Full press release:
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.
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Oil prices go up, airlines go bankrupt, economy goes down. Pretty simple equation for the future.
$200 million in customer money that vanished from MF Global is believed to have surfaced at JPMorgan Chase in Britain
http://dealbook.nytimes.com/2011/11/28/money-found-in-britain-may-belong...
Off topic post here, because it's the first place I could put it this morning for you to all enjoy (or get your blood pressure spiking).
From the new series, 'Hang 'Em High' (alternatively titled: 'History's Greatest Kleptocracy; Is That The Rotten Odor That We Smell?)':
in July 2008, then-Treasury Secretary Hank Paulson met with several hedge fund managers and told them that a government takeover of Fannie Mae and Freddie Mac was a very real possibility.
How Nank Paulson Gave Hedge Funds Advance Word of Fannie Mae Rescue*Just a week prior to that meeting, he had testified in the Senate and told media outlets that government intervention in Fannie and Freddie was near impossible.
I like flying, but I wouldn't ride commercial anymore, even if someone paid for my ticket. Between the TSA thugs and the declining budgets for proper airplane maintenance... NO FUCKING THANKS.
AMR is bankrupt again?? Weren't they just flying high and in 1st place and shit a few years ago?
There was a time when bankruptcy meant being taken to the woodshed and shot, once and for all...
Now we're 'kind of bankrupt' or 'a tad bust' or 'maybe you know, just a bit bankrupt but that's ok'.
Maybe one day we'll end this farce and insist that those who borrow real money pay it back, and those that don't work fucking starve until they put some fucking effort in...
I last flew in 2002. I wouldn't even know what to do at the airport now.
Oh, right, that's a lie.
No one could have seen this coming. . .
I just flew a few time after 5 years of not flying. Trust me its about as close to unbearable as it gets.
Pretty soon they'll have subway straps in the aisles and call them "premium" seating
"Good morning, ladies and gentlemen. This is your captain speaking. Feel free to get up and go to the toilets during this long flight. Those standing at the back will be more than happy to take your seats."
I saw a plane once with 'crunchie' written on it, had a guy stood on the fuckin wing...
Now that's cattle class...
AMR is bankrupt? Shut down the whole freaking industry for reasons too numerous to mention. I hate the airline "industry". Bankrupt? These guys are subsidized out the wazoo, and always have been. <bleep> them in the <bleep> sideways.
Truth, you never know, maybe someone should just shoot the bastard...
There has to be some justice somewhere, even if it's not in the land of the free...
I've wondered about this.
Airlines are the first to feel the impact because of their ancient practice in oil futures pricing, but it was the trains that got hit first years ago. I know there is a revival of sorts because of the annoyances of airports and the perverts they hire at the TSA. But, trains have been hit. Both for people transport and food.
Trucking has been getting clobbered because they download the costs and therefore lower profitability to the driver. Less people get into the industry because getting paid nothing to work long hours on the most dangerous place on the planet if going by numbers, the US highway system kills as many people as heart attacks in the US btw.
This effects North American bike sales and manufacturing because shipping becomes a premium and the cost differences between manufacturing and retail is now a +60% < +200% premium from shop to shelf. By the time it gets to a consumer, a cheap used car is cheaper by price point. Obviously not upkeep, remember we are talking about US consumers. Think hand to mouth.
Airlines. Too many of them anyways.
My guess is we'll hear news about greyhound or the regional bus-lines dropping dead soon.
Trains
Trucking
- Increased cost of bikes ---> less bikes sold less profit..etc..
Airlines
Buses
personal cars
Cabs <--- Can adjust meter rates same day, same hour, same minute.
It's a straw man, but there has to be a daisy chain of transport industry that fail one after another.
Don't forget that airlines in BK tend to reduce costs through abrogating contracts and renegotiating cheaper wages and pensions. They also stiff vendors through missed payments, renegotiate those contracts and thin margins for those folks as well. The point being that they (BK airline) can then undercut the competition which could also send more airlines into BK, kind of a competitive devaluation type phenomenon. Doesn't bode well for the several hundred thousand airline workers.
Don't forget shipping.
or....
passengers get groped or irradiated
decide not to fly
airlines go bankrupt
dont tell me i'm the only one who has chosen to forego flying due to ridiculous level of security measures
I'm with you. I try to curtail flying as much as possible. We can afford to travel. But choose not to.
I proudly wear my "certified patriot" barcode T-shirt through those groping lines.
PATRIOTS get fondled, terrorists choose not to fly. What do you have to hide? The only way to save our freedoms is to destroy them.
Comrade, the true proletarians have their bar code tattooed on their kiesters.
I used to fly to my parent's home for Thanksgiving, Christmas, and other family events. Its an eight hour drive. I haven't flown since TSA in conjunction with the airlines began molesting children. It takes longer to get where I'm going, but I save money and can haul more stuff with me.
Funny thing is that the security measures are only there to make you *feel* secure. It's well known that anyone can smuggle a bomb in his suitcase and have the detonator in his carry-on... The fact that not more planes blow up mid-air means there are no terrorists... and they still keep the security measures up, even though people fly less because of them... The security industry is killing the airlines... then again it 's the same stories with the war-industry, it's killing peace...
Recession in USA is just around the corner.
That corner was rounded looong ago my friend.
I mean the official word.
That will never happen in the MSM or TPTB. Too much to lose, namely their heads.
You mean complete collapse is around the corner
Hey Buffet ad this in with your collection why stop @ BoA
I,m sure JPM can use a few of these jets to drop food stamps for the fine peeps onthe U S .
American Airlines is trying to set the record for bailouts.
Aren't they already the record holder?
US airways holds the guinnes book of serial airline bankruptcy.
No way, tax payers always get repaid in full!
classic crashlanding. but face it, amr has been broke for years
Do what is right, just file for liquidation. Save the misery of having a zombie airline.
Zombie airlines. First thing to go is the maintenance program. Jack screws and fried wiring harnesses bitchez!
Remember once she's inverted there's no coming back.
I'll miss those tattooed stewardesses.
Beware the airline that doesn't file chapter 11 on a regular basis. It's part of the business model.
Air miles are just a proxy for fiat currencies
*Poof*
Aaaaannd it's gone... it's all gone.
http://www.youtube.com/watch?v=jrLbY4-Q99A&feature=related
doh!
NEXT ONE TO FILE FOR BANKRUPTCY IS BANK OF AMERICA I.E. ANYTHING WITH AMERICA ON IT (OR EVEN USD) IT IS AT RISK THESE DAYS...WATCH OUT..
< BAC hits the 4's today
< later
Yep, the corner behind, around 2009, depression ahead...
Any idea who is owed the $29 billion ?
What's the knock on ?
July 20, 2011
American Airlines is excited to announce that we've placed an order for 460 narrowbody planes from Boeing & Airbus. This marks the largest aircraft purchase in history!
http://www.youtube.com/watch?v=B9w4xP5NiO8&feature=related
Fckn pilots. So pretentious.
So the Rothschilds advised AA a private little jubilee?
I wonder how the suppliers and employees feel about this.
Now they'll fly just like Kiwi's do ...
excuse my english
annnndddd....wait for it....futures are up.
more shocking is Tiffany "missing" earnings. Boy, the 1% must be really struggling
/sarc
Cut labor costs and screw creditors increases profitability. It's a trick taught by the white shoe boys.
Chapter 11, Fuck!
Did the two retiring gentlemen each depart with a little black box full of gold?
Blame it on the terrorists ....I mean tourists.... I mean DHS.... I mean OPEC.... I mean the Fed.... I mean well you know
--Submitted by Tyler Durden on 11/29/2011 07:07 -0500
TD...intentional? If so, very clever my friend.
Aren't all the airlines required to go bankrupt every 10 or 20 years?
Bullish! /sarc
Yeah, I have unused FF miles with them. And a $200 voucher! And a ticket to fly them next month........hmm.
Should have shorted these fuckers last month (eh, shorted Deutsche Bank instead...which is treating me fine). At least then I'd have an upside, though.
Citi was offering double AA miles with purchases made on cyber monday. hahahahaah, citi and AA, a match made in heaven.
This is what happens to companies that work with their unions. Cooperating with labor unions works about as well as cooperating with vampires or rapists.
Yeah, like the corrupt execs at the top or the insane price of commodities due to Ben Shalom and his merry band of wall street speculators had nothing to do with this right? I'm really tired of people blaming unions for the downfall of the world. That shit is getting REALLY old. Unions might be responsible for 30% of the problems that plague us. The rest and majority of the problems reside at the top and are created by the corrupt and greedy 1%. You can't expect that the common worker will accept austerity when the CEO and upper managements' paycheck is increasing 10% a year. The whole do as I say not as I do Henry VIII shit has come to an end.
Good riddance. Chapter 11, always the best chapter in a book.
Come on this Chapter 11 is just a way to force the trade unions and employees to reduce costs. AMR has eben the only one not filing Chapter 11 a few years ago and found themselves in competitve disadvantage against Delta and all the rest which filed C 11.
i thought all balance sheets were pristine
Those cocksuckers are allowing the TSA to rape their clients, no surprise this is happening. All of them need to go bankrupt till the TSA is abolished.
I traded in my miles long ago for magazines like Wine Spectator so I can find out a nice tipple to slurp on while I read about the demise of the USA.
When you pay peanuts expect only monkeys to apply.
I'm sure there will be thousands of illegals waiting to apply which the government will look the other way to. Oh wait...
They used to have the best hot fudge sundaes in first class.
But, they suck at what they do. If you have to charge $5 for a chocolate chip cookie, you got a problem.
No other industry pisses more people off so consistently, and then expects you to come back for more, than airline companies.
http://vegasxau.blogspot.com
Why announce now, why not Black Friday ? oh ya, didn't want the sheeple not to spend money on pepper spray....
Don't tell me. AMR will return as New AMR after it has been stripped to pieces ("restructured"), and will be offered at $20 a pop as the bargain of the century by Goldman Sachs. I suppose Delta Air will strip AMR of whatever is left and offer the public the crappiest flying experience in the world in accordance with their policy to give every passenger deep vein thrombosis.
Because everyone wants to fly the friendly skies where you get a free sexual assualt with every trip. I haven't flown in 3 years... suck that airlines and TSA goons!
What's the severance package for the CEO like?
Why bother asking. You know what the answer is going to be.
Sorry folks, Chapter 11 is only available for corporate personages.
WB7,
Not true. Certain consumer debtors can file Chapter 11 (and some must if choosing between that and Chapter 13).
They already robbed me of two pre-paid tickets and 90,000 FF miles. Couldn't have happened to a nicer bunch of airholes. AA is what their pilots needed, the services were 'bottom-rate', and they sucked money out of your pocket faster than a Vegas Strip hooker with a shop vac up her ass.
A job well done TSA/DHS. Your plan to take down the airline industry is running as planned.
+1. Indeed.
Next year, you'll be subjected to a TSA assault and a free chest x-ray to get into a mall on Black Friday.
The sheep are being trained to stay at home.
Highly symbolic.
American Airlines files for bankruptcy, and will re-emerge post bankruptcy as Charlemagne Air;
'Something special in the air.'
The Carolingians are showing their livery. Next one down will be re-birthed as Clovis Air.
F'n pilots fault. They should have given concessions so mngt wouldn't have to BK it from them.
just redeemed my travel plus c c balance for $400..not looking to fly the fascist skies anytime soon..wonder what would happen if alot of us did the same?? chase might get a bit testy. those rosey green shoots might just turn brown..crash the banks and redeem you points for cash..if you want to bring the banksters down.
to those who support unions..they were coopted long ago..peanuts for the rank an file while the goons at the top rub shoulders with the elite at the plaza and 4 seasons.
and 365 blackout days per year.
So, who's next? Thank God I booked my upcoming flight on Saturday with Cayman Airways.
I missed the prefered shares price of $5 when Continental emerged from Ch11. Since they used the BC to shed their pension liabilities and other drags on bottom line, they emerged much smaller and stronger. I will keep an eye on this BC to see if I can pick up a 3 to 8 banger on it once it emerges.
They can thank the TSA for this. I have COMPLETELY curtailed any unnecessary flying, whether that be business or private purposes. No way I stand in line to get groped by some big ugly fat dude.....
Nice job Homeland Security......real nice job here.
But I feel safer {sarc}
well. you got TSA because airport security was a complete fucking joke pre 9/11.... You do remember who was responsible for security, do you?
Financial advisor is "Rothschild, Inc". Good move AMR.
taking vacations and esp flying to them is just supporting the elite by maintaining an everything is normal meme ..stop buying into the lies..
do not spend for anything that supports the banks and the elite..
in this case "drop out tune in" is a weapon. use it.
The words "Bankrupt" and "American" seem to go hand in hand.
Benny seems to do your country justice.
Frequent flier points should be redeemable for the new Gensler Chilton CFTC points system on Donk-Fraud Airlines, but only if you stayed in a Holiday Inn Express last night.
TradeWithDave.com
The great unwashed are being discouraged to fly.. be prepared to start taking intercity busses (like they do in Mexico), it is becoming a much more attractive mode of travel The fuel and public capital sunk into the air transportation system is reserved for the Meritocracy.
The bus companies aught to be having some very similar problems.
Note that in Mexico the number of competing airlines have been reduced.
The airline industry simply doesn't return its cost of capital:
http://www.bloomberg.com/video/81627102/
Ticket prices have to rise spectacularly in order to have a viable airline industry, the subsidies have to disappear.
The
they love to file and it shows
Another interesting transportation sector story is Thomas Cook.
People with housing asset price bubbles in their country will borrow on the equity in their homes to spend, and one of the things they spend on is travel. Thomas Cook is considered too big to fail, which will directly impact banking in the Eurozone. Bankruptcy is a foregone conclusion, but for the moment is being held off by more credit.
They trade on the london exchange, so I would presume credit default swaps against this type of debt must be through the roof. RBS received another injection of liquidity from the UK central bank right after the bailout.
A sudden banktruptcy in this sector can cause serious concern in the banking sector, I would say something like this is a black swan in waiting. This has all the same warts and features of corporate malfeasance, such as golden parachutes at the time of financial duress.
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/8918227/RBS-rescues-Thomas-Cook.html
No problem. Just cut back on maintenance and customer service, apply the saving toward executive bonuses, and get those birds back up in the air, and they'll come out of this in no time. The question is how much is Bernake going to have to print to bail them out and cover the bonuses.
I know people who have only flown on American Airlines. They keep telling me they won't fly anyone else because AA is the best. I flew on AA once and t was the worst run Airline I have ever used. I told the guy that AA is horrible and he should tryContinental, I get a huge why in response. These are the same people who only drive Ford and have nevr tried another brand because they live under the false asumption that they are the best because they say they are.
I know some of those people as well. I do remember when American at least tried to be the best airline in the U.S. I refuse to fly American, as much as I can. I never fly them personally, unless it is to unload some miles.
Continental was the best, but I wonder how UAL will ruin it during this merger.
Bloody effing terrorists!
son of a bitch! what happen to frequent flyer miles?
The big scam allowed by the government. In order to obtain an operating ceritificate the company must show financial responsibility. When an airline files bankruptcy it changes the name and the new company is financially responsible and given a new operating certificate. American was the only legacy carrier who had not filed and was at a competitive disadvantage. If previous bankrupt airlines were not given a competitive advantge it would be a different picture.
so they went bankrupt but are operating as usual, so tell me exactly what happened?
Don't even get me started on US based airlines. I need to be thouroughy drunk or drugged to deal with the whole experience. After downing 3-4 Absolute dirty martinis, I get my obligatory groping - and it's not so bad at that point. Then we're off to the push and shove onto the plane where more often than not my hand carry get tagged because they have me on some dilapidated regional jet operated by neophyte politically correct crews. I then get my dose of condescending saftey warnings and bag of fricken peanuts. The whole way I get to see middle aged bitter union flight attendants just hoping you will break some sort of rule so they can report you to the FBI upon landing.
Flying to no-name regionals, you get the pretty young things. Cross-country, they have more seniority and attitude. But my pet gripe is international first class, where they are so old and 'senior' that if the plane crashes, we passengers will be having to help them off!
Regulated airlines were forced to compete with service and this is what people miss. Once deregulated, service would give way to price. Most people think an airline can serve like the past but a 40 year flight attendant is not going to smile and a 40 year ramper is not going to get your bag any quicker. Don't know why it took so long to file but it was needed to compete. I feel bad for the workers, they should have known it would be this way. Sucks.
In 2003 american tried to file bankruptcy. All the unions got together and gave back thus avoiding bankruptcy. At the time the company stated they were 21billion in debt. The company claimes they are 11billion in debt with 4 billion in assests. Even losing money for the last 8 years they have paid down their debt on average of over 1 billion a year due to labor give backs. Management gave themselves 250 million in performance bonuses a few years back even though there was only 1 quarter of profit. The company could have continued this scenario for years. No one was going to strike due to economy. Why kill the cash cow now? This company has over 80 VP's and has always been management heavy. Kicking the dead labor horse or ass kissing is the only way management gains any recognition. The question still is why now. This is not a labor issue, it is about greed. Throw as many workers under the bus as possible. Out source what you can. Do like the other airlines do. Sort of like seeing someone rob your neigbors house and you hope they leave something for you instead if doing the right thing