Under Chapter 11, American Airlines cancels hundreds of flights

October 3, 2012 3:55 pm Published by

American Airlines has cancelled hundreds of flights in recent weeks with more on the horizon. The company reported that nearly 300 flights were cancelled to cope with the increasing number of pilots who are reporting sick and crews who are repeatedly filling maintenance reports. The recent changes seem to have developed from the company’s Chapter 11 bankruptcy.

A bankruptcy ruling earlier this month allowed the company to throw out its union contract with pilots, allowing the company to impose new regulations on the wages of the pilots as well as on their work schedules. Further cutting costs, the company has also announced 11,000 layoff notices. The result of the turmoil has caused American Airlines to cancel the largest number of flights ever compared to any other U.S airline.
The company is trying to cushion the passengers from the effects of the cancellation of flights. It is doing this by letting passengers fly standby for earlier flights at no extra charge. The company has also let the crew be more flexible with the snacks during flights; the passengers are now getting more snacks in a bid to relax them during delays.

AMR Corp, the company that owns both American and Eagle, is in the process of trying to cut down on its total labor costs by $1 billion. It is doing this under a Chapter 11 bankruptcy protection, also known as financial restructuring. Business bankruptcy protection is a legal form of protection offered by the courts to companies that are in the process of managing their finances through debt reorganization. Sometimes companies must make difficult decisions during bankruptcy. Ultimately, however, many companies find that bankruptcy provides them with a way out of debt and into a successful future.

Source: NBC New York, “American Cancels 300 Flights This Week,” David Koening, Sept. 20, 2012

Source: Los Angeles Times, “American Airlines cancels hundreds of flights through October,” Hugo Martín, Sept. 21, 2012

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