American Airlines' parent files for Ch. 11 bankruptcy protection; CEO steps down

[Scuba]

http://hosted.ap.org/dynamic/stories/U/US_AMERICAN_AIRLINES_BANKRUPTCY?SITE=WIMIL&SECTION=HOME&TEMPLATE=DEFAULT



..snip..

FORT WORTH, Texas (AP) -- American Airlines and its parent company are filing for bankruptcy protection as they try to cut costs and unload massive debt built up by years of high fuel prices and labor struggles. There will no impact on travelers for now.

The nation's third-largest airline also said Tuesday that CEO Gerard Arpey had stepped down and was replaced by company president Thomas W. Horton.

AMR Corp. has continued to lose money while other U.S. airlines returned to profitability in the last two years.


..end..


Or perhaps from massive debt from having lousy management. Wonder how much the stockholders have been paid in recent years. Wonder how much the CEO golden parachute is comforting him.

[no_hypocrisy]

1. Are there provisions in an average CEO's golden parachute contract that

it's forfeited if the corporation files for bankruptcy under his/her stewardship?

[Hassin Bin Sober]

2. LOL. Somehow, the invisible hand of the free market doesn't reach that high.

[no_hypocrisy]

6. Agreed. What I still don't understand is how the shareholders

go along with an undeserved, unearned golden parachute. That's money taken out of THEIR pockets.

[Hassin Bin Sober]

7. The same reason, with 78% support, we are having a real hard time raising taxes on the wealthy.

[rdking647]

8. in a bankruptcy any agreement like that can be tossed out

the judge can rewrite any employment contract

[Safetykitten]

3. Executive bonus time!

[Bonhomme Richard]

4. I hope they don't screw the employees. My friend is a Captain and

very close to retiring.

[Tesha]

5. Air travel as we know it is nearly over.

The great unwashed travelling by air isn't a sustainable
proposition in the long run.

Tesha

[rdking647]

9. it was inevitable

they have been negotiating for over 5 years over generous employee pensions that the other airlines have already shed in bankruptcy court. Their was no way for AMR to compete in an industry where their costs where so much higher

[spartan61]

10. Are you aware that the employees took a 33% concession

in 2003 to save the company from bankruptcy? There was no snap back so the employees are still working under that contract. They also lost 1/3 of their already earned vacations as well as work rules that made the FAs work 14 hours with no food (sometime their was no time to pick up something in the airport to eat between flights) and only 8 hours of a break after a long day. That 8 hour break consisted of debriefing after the flight, waiting for the shuttle to take them to their hotel, riding to the hotel, finding something quickly to eat, and then only about 5 hours sleep. Then it's pick up time back to the airport for sign in, pre flight, etc. Their pay doesn't start until push back from the gate, so if their is a delay for any reason and the pax are in their seats, it's time donated to AA. All of this while the "talented" management makes sure to make get their bonuses for their "great" decisions. (Even while the company is losing billions each year.) Right now mgt is trying to say it is because of their high labor costs. That is pure and total BULLSHIT!! Generous pensions??? Maybe for mgt but not employees.

[rdking647]

11. none of the matters

the fact is their labor costs are much higher than the other carriers since the others all went thru BK and reduced their costs significantly. 2003 was 8 years ago. all the other airlines already went thru BK since then

If it costs $10 to pruduce a product and 4 of the 5 companies that make that product go thru BK and can now make the product for $5 if they decide to sell it for $7 the remaining company cant compete. Thats just a simple fact of life

and if you look at this kist an airline going BK is just a way of life for them. Thats why I would never invest in any airline
http://www.airlines.org/Economics/DataAnalysis/Pages/USAirlineBankruptciesServiceCessations.aspx