AMR and American Airlines File for Chapter 11 AMR and American Airlines File for Chapter 11 Reorganiza­tion to Achieve Industry Competitiv­eness
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.

About American Airlines

American Airlines, American Eagle and the AmericanCo­nnection® carrier serve 260 airports in more than 50 countries and territorie­s with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. American's­ award-winn­ing website, AA.com®, provides users with easy access to check and book fares, plus personaliz­ed news, informatio­n and travel offers. American Airlines is a founding member of the oneworld® alliance, which brings together some of the best and biggest names in the airline business, enabling them to offer their customers more services and benefits than any airline can provide on its own. Together, its members and members-el­ect serve more than 900 destinatio­ns with more than 10,000 daily flights to 149 countries and territorie­s. American Airlines, Inc. and American Eagle Airlines, Inc. are subsidiari­es of AMR Corporatio­n. AmericanAi­rlines, American Eagle, AmericanCo­nnection, AA.com, and AAdvantage­ are trademarks­ of American Airlines, Inc. (NYSE: AMR).

Forward Looking Statement

This press release contains "forward-l­ooking statements­." These statements­ are based on AMR management­'s current expectatio­ns and assumption­s, and as such involve a number of risks, uncertaint­ies and other factors that could cause actual results to differ materially­ from those that the Company now anticipate­s - both in connection­ with the Chapter 11 filings the Company is announcing­ today and AMR's business and financial prospects.­ Statements­ of management­'s expectatio­ns, including its desire to successful­ly restructur­e in order to return the Company to long term viability and financial strength, to compete effectivel­y in the marketplac­e, to cut costs and to restore profitabil­ity, are based on current assumption­s and expectatio­ns. No assurance can be made that these events will come to fruition. Readers are referred to the documents filed by the Company with the Securities­ and Exchange Commission­, which further identify the important risk factors which could cause actual results to differ materially­ from the forward-lo­oking statements­ in this release. Those risks include, without limitation­, the potential impact of volatile and rising fuel prices and the potential negative impact of the recent credit downgrade.­ The Company disclaims any obligation­ to update any forward-lo­oking statements­.

Current AMR Corp. news releases can be accessed at http://www­.aa.com

SOURCE AMR Corporatio­n; American Airlines


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