AMR Files for Chapter 11, Continues Operations

 AMR, American Airlines' parent company, filed for Chapter 11 bankruptcy protection Tuesday, in order to reorganize its cost and debt structure and remain a competitive carrier. "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," said AMR chairman, CEO and president Thomas W. Horton. In part due to disproportionately high labor costs, American has continued to post quarterly losses -- $162 million in the third quarter of this year -- even as its competitors have enjoyed growing profits. Horton was appointed chairman and CEO Tuesday, following the announcement that former CEO Gerard Arpey would retire. Horton assured customers, suppliers and employees that throughout the reorganization process American and American Eagle would continue to fly normal schedules, sell and honor previously reserved tickets, fully maintain the carrier's frequent-flyer program, provide employee benefits, and pay employees and suppliers.