Thursday, December 29, 2011

American Airlines Files Chapter 11- No Fear of Flying

As if it isn’t bad enough traveling during the holiday season, with higher delays, severe weather, getting bumped,  and everyone’s biggest fear lost luggage—American Airline customers have bigger things to worry about.

The last major U.S. airline finally filed for Chapter 11 bankruptcy.  It came as no surprise that American Airlines who have avoided bankruptcy for over the past decade finally made a gap too big to fix—depressing news for the carriers, employees, shareholders and American customers.   Should customers be worried about what will happen next as the airline company travels down the road of Chapter 11 bankruptcies?

For the time being, everything—meaning tickets, reservations and mileage programs—will be honored.  According to a statement on the American Airlines website that reads “American Airlines is flying normal schedules and conducting business as usual worldwide. Additional information about the Chapter 11 reorganization is available at www.aa.com/restructuring.”

In histories past all major airlines have gone through bankruptcy within the last decade—United, Delta, US Airways, etc.  All were able to bounce back. Thomas Horton the successor to Gerard Arpey , AA’s chairman and  CEO who is retiring, claims that the airline was forced into bankruptcy due to cost disadvantages it faced with its competitors.

American has been seen as the weakest of all the major airlines for some time now.  Southwest is the only major U.S. airline that has not filed for bankruptcy.  Judging by previous bankrupt airlines we can predict that American Airlines will find its way back.  In the airline business customer loyalty is its most costly commodity.  American Airlines does not want to lose any of its fans or customers, so coupled with their cash reserves, funds from ongoing ticket sales and a normal routine the airline should be making a strong turn around.  The airline is trying to avoid a debtor-in-possession loan that most companies typically require to function under Chapter 11.

So if you are an American flier, you have nothing to worry about just as long as you don’t own any American Airline stock.

For information on filing for Chapter 7 or Chapter 13 personal bankruptcy protection, please call Macey Bankruptcy Law toll-free today at 800-260-1402 to speak with a qualified and compassionate bankruptcy attorney or log onto www.maceybankruptcylaw.com. In the last three years, we have helped over 100,000 people who, like you, have complicated financial and legal encumbrances. We may be able to help you, too.

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