AA bankruptcy won't affect fliers, company says

In this June 29, 2011 file photo, an American Airlines aircraft at Dallas-Fort Worth International Airport, in Grapevine, Texas. File,AP Photo/Tony Gutierrez

For the 240,000 passengers who fly American Airlines each day, the airline's bankruptcy filing should have little noticeable impact.

AMR Corp., the airline's parent company, said that it will continue normal flight operations as it heads to federal court to restructure. The move is aimed at reducing AMR's hefty costs, including for labor and fuel.

Delta, United, Continental and US Airways have all gone through Chapter 11. Travelers continued to book tickets. Planes still took off and landed and frequent flier miles were still earned and redeemed.

American Airlines files for bankruptcy

The only risk to passengers is if the restructuring fails, the airline ultimately liquidates and ceases to fly. Still, many travelers are protected in that case if they bought tickets with a credit card.

As for frequent flier miles, Eastern Airlines, Pan Am and Trans World Airlines all ceased flying but miles in their programs were transferred over to other airlines that bought some of their assets. TWA miles actually went into American Airlines' frequent flier program, AAdvantage.

"Miles are safe," said Gary Leff, co-founder of frequent flier site MilePoint. He said the bankruptcies of past airlines "are instructive." He even suggested there might be some promotions to keep loyal travelers.

American is the nation's third-largest airline behind United Continental Holdings Inc. and Delta Air Lines Inc. Like its rivals, American has raised fares over the past year to offset the high cost of fuel. But for AMR, it hasn't been enough.

AMR said fuel costs rose 40 percent in the third quarter. Combined with AMR's much higher labor costs, that resulted in a $162 million quarterly loss for AMR, while Delta and United had a combined profit of $1.2 billion. American was the only major U.S. airline to lose money last year, and they have lost money in 14 of the last 16 quarters. AMR was also the only U.S. airline who didn't file for bankruptcy protection after September 11.

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