FORT WORTH, Texas (AP) -- American Airlines' parent company is seeking Chapter 11 bankruptcy protection as it seeks to unload massive debt built up by years of accelerating jet fuel prices and labor struggles.
The nation's third largest airline also said its CEO Gerard Arpey will step down. He's being replaced by Thomas Horton, currently the company's president.
Fort Worth, Texas-based AMR Corp., along with its regional affiliate AMR Eagle Holding Corp. said Tuesday that they filed voluntary petitions to reorganize.
American says it sought protection to reduce its costs and debt to remain competitive.
The airline says it will continue normal flight operations during the reorganization.
American was the only major U.S. airline that didn't file for bankruptcy protection after the 2001 terrorist attacks. The last major airline to file for bankruptcy protection was Delta in 2005.
American says labor-contract rules force it to spend at least $600 million more than other airlines.
Besides higher labor costs, American also struggled with rising jet fuel costs. Jet fuel cost an average of $3 per gallon so far this year - a record according to government data that goes back to 1990. Jet fuel is more expensive now than the average of $2.96 per gallon in 2008, when oil rose above $147 per barrel for the first time. It's risen 56.4 percent in the past five years. The average price of jet fuel was $1.92 per gallon in 2006.
American lost $162 million in the third quarter and has lost money in 14 of the last 16 quarters.
The Oklahoma City Thunder and the Thunder Cares Foundation today announced a joint donation of $1 million to benefit the local chapters of the American Red Cross and the Salvation Army, as well as otherMore >>
The Thunder and the Thunder Cares Foundation today announced a joint donation of $1 million to benefit the local chapters of the American Red Cross and the Salvation Army.More >>
Oklahoma City - On Tuesday, May 21, 2013, Oklahoma City Thunder star Kevin Durant through his family foundation pledged $1 million to the American Red Cross disaster relief efforts in Oklahoma. "The RedMore >>
Kevin Durant Family Foundation Pledges $1 Million for Red Cross Relief Efforts.More >>
Angelina Jolie says that she has had a preventive double mastectomy after learning she carried a gene that made it extremely likely she would get breast cancer.More >>
"I hope that other women can benefit from my experience," Angelina Jolie wrote in a powerful op-ed article Tuesday, explaining her decision to go public with having her breasts removed to avoid cancer.More >>
Britain's Prince Harry is headed to the New Jersey shore to visit two communities hard hit by Superstorm Sandy.More >>
Britain's Prince Harry toured two New Jersey shore communities devastated by Superstorm Sandy, shaking hands with emergency personnel and construction workers before spending Tuesday afternoon in New York City at events...More >>