AMR, American Airlines File for Chapter 11

   AMR Corp. the parent of American Airlines, said it filed on Tuesday voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York.
   The company said its board of directors determined “a Chapter 11 reorganization is in the best interest of the company and its stakeholders.” American will continue to conduct business normally, flying normal schedules and paying suppliers for goods and services received during the reorganization process.
   AMR said it had 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.”
   Thomas W. Horton, chairman and chief executive officer, said the reorganization 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.”
   He said the company “must address our cost structure, including labor costs…. 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.”
   In the first nine months of this year AMR loss $884 million compared to a loss of $373 million in the first nine months of 2010. That loss came even as revenue grew to $18 billion in the first nine months of 2011 compared to $16.6 billion in the same 2010 period.
   Cargo revenue also has grown this year to $532 million in the first nine months, compared to $491 million in the first nine months of 2010.