AMR Corporation, the parent company of American Airlines, filed Tuesday for Chapter 11 bankruptcy reorganization in the US Bankruptcy Court in the Southern District of New York.
In a statement, the carrier, currently the third largest US airline, said the decision to reorganize was made “in order to achieve a cost and debt structure that is competitive in the airline industry,” adding that it was in the “best interest of the Company and its stakeholders.”
The announcement also came along with the news that CEO Gerard Arpey would also step down and be replaced by Thomas Horton, the current president of American Airlines.
“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,” said Thomas Horton in a statement.
According to the filing, AA listed assets of $24.72 billion and liabilities of $29.55 billion. The company said it has $4.1 billion in cash.
Reuters reports that prior to the filing, American was the only major US airline that been able to avoid bankruptcy since the 2001 terrorist attacks.
“It completes the cycle,” Helane Becker, an analyst with Dahlman Rose & Co, told Reuters. “Every major airline in the united States has filed for Chapter 11.”
Despite the filing, president Horton assured American Airlines customers that the company expects to continue normal flight operations during the reorganization.
“American’s customers are always 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,” said Horton in a statement. “American serves 260 airports in more than 50 countries and territories, and we are committed to maintaining a strong presence in worldwide markets.”