Friday, December 2, 2011

American Airlines Lands in Bankruptcy

With the holiday travel season coming, it is terrible news that American Airlines has filed for bankruptcy protection.   American Airlines will be the sixth major U.S. carrier to seek bankruptcy protection this decade.  Additionally, many travelers have already purchased their American Airlines airplane tickets in advance to get a fair price for air plane tickets.   The US economy is still trying to recover, the American Airlines bankruptcy news is not helping to build consumer confidence in the market place.    But how does this impact the travelers?  The planes will keep flying, frequent-flier miles are still good, and reservations are still honored ( Navigating AA's Bankruptcy Filing: What Fliers Can Expect to Happen Next 11/30/2011, The Wall Street Journal, pg A5).   It is good news that the travelers will not be affected from this.

Analysts viewed AMR's filing as broadly positive for the airline industry, in part because American is expected to reduce excess capacity that has led to unprofitable routes.  Assuming a successful reorganization, AMR may be smaller with a cost structure that could be profitable.

Enjoy your holiday season,

Ben  Brock

1 comment:

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