Five years ago today, American Airlines filed for bankruptcy protection as the Fort Worth-based carrier faced rising fuel prices and billions in dollars of debt.
“No company ever wants to face a restructuring like this ... we spent 10 years trying to avoid this,” said Tom Horton, who was also named the new chief executive of American on the same day. “The future on the other side of this restructuring we think is very bright.”
In its filing made in New York, American’s parent company, AMR Corp., said it had $24.7 billion in assets and $29.6 billion in debt. It also had $4.1 billion in cash so it did not need to obtain debtor-in-possession financing to continue operations while in bankruptcy.
At the time, Horton said he hoped to manage the company through the bankruptcy process within 18 months, negotiating new labor contracts and creditor agreements.
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Instead, it took two years for the carrier to emerge from bankruptcy and only after it merged with US Airways, installing Doug Parker as the new chief executive of American Airlines Group.
“Our goal here is to go and restore American Airlines to its position as the greatest airline in the world,” Parker said on the December day that the two airlines merged to create the new American.”
Since then, the company has posted record profits, invested in new planes and customer initiatives and reinstated a profit-sharing plan for employees. However, American has continued to face operational challenges as it integrated the two airlines and has disappointed Wall Street with declining unit revenues.
This article contains material from the Star-Telegram archives.
American Airlines, then and now
The day of bankruptcy filing
*Figures are for full year 2011 and for full year 2015