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American Airlines files for bankruptcy


American Airlines

American Airlines

American Airlines and its parent company filed 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 be no impact on travelers for now, the company said.

The nation’s third-largest airline also said Tuesday that CEO Gerard Arpey 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.

Horton said the board of directors unanimously decided to file for bankruptcy after meeting Monday in New York and again by conference call on Monday night.

It was a “very difficult decision made by our board … but I think it’s the right decision at the right time,” Horton said at a Tuesday news conference.

AA bankruptcy won’t affect fliers, company says

“The last decade has been extraordinarily hard on the U.S. airline industry,” Horton said, noting that bankruptcy filings by other major airlines. “The people of American Airlines have worked very hard and very honorably over the past decade to avoid that path but we are now at a point where it’s time to turn the page and move forward.”

American said it would operate normally while it reorganizes in bankruptcy. The airline said it would continue to operate flights, honor tickets and take reservations. It said the AAdvantage frequent-flier program would not be affected.