– American Airlines files for bankruptcy protection; incoming CEO says flights may be cut (Washington Post, Nov. 29 2011):
DALLAS — The parent company of American Airlines filed for bankruptcy protection Tuesday, seeking relief from crushing debt caused by high fuel prices and expensive labor contracts that its competitors shed years ago.
The company also replaced its CEO, and the incoming leader said American would probably cut its flight schedule “modestly” while it reorganizes. He did not give specifics. American said its frequent-flier program would be unaffected.
AMR Corp., which owns American, was one of the last major U.S. airline companies that had avoided bankruptcy. Competitors used bankruptcy to shed costly labor contracts, unburden themselves of debt, and start making money again. Delta was the last major airline to file for bankruptcy protection, in 2005.
American — the nation’s third-largest airline and proud of an 80-year history that reaches back to the dawn of passenger travel — was stuck with higher costs and had to match its competitors’ lower fares or lose passengers.
Other airlines also grew by pursuing acquisitions and expanding overseas. American was the biggest airline in the world in 2008, but has been surpassed by United, which combined with Continental, and Delta, which bought Northwest.
April 1 (CNN) – An American Airlines 737 jetliner with 134 passengers aboard made an emergency landing in Dayton, Ohio, Friday morning after passengers became ill and at least two fainted, CNN affiliates in Dayton reported.
Shortly after American Flight 547 left Reagan National Airport in Washington bound for Chicago, two flight attendants reported feeling dizzy, WDTN reported, citing American spokesman Tim Smith. Pilots dropped oxygen masks in the cabin, but at least two and as many as four passengers fainted, according to the CNN affiliate reports.
Industry officials and analysts urge Washington to act to avert a collapse.
New York – America’s aviation system could be at risk of collapsing by the beginning of next year.
That warning from aviation experts has prompted some industry leaders to call for re-regulation, something considered almost heresy until now. Others are urging Washington to do more to rein in the oil speculators pushing up fuel costs.
But there is agreement among airline officials and analysts that Washington and the two presidential candidates need to recognize the severity of the crisis and take some action now to avert an economically crippling collapse in the near future.
“Unless something is done to move toward some kind of fix, we’re going to see every one of our major airlines in bankruptcy,” says Robert Crandall, former chairman of American Airlines. “If that isn’t enough of a crisis to alert everybody, then I don’t know what it will take.”
As a result of the spike upward in oil prices, almost every major airline is now losing millions of dollars each quarter.
Unless the price of oil comes down, most are expected to run out of cash by the end of this year or the beginning of next. In a bid to stave off bankruptcy, they’re already retrenching. They plan to lay off an estimated 25,000 employees, park hundreds of planes, and cut the number of flights they offer.
In addition, a recent study by the Business Travel Coalition, which represents corporate travel managers, estimates that 100 regional and 50 major airports nationwide will lose some of or all their air service by the end of the year.
“I’ve been trying to turn on the emergency sirens to raise awareness in Washington and back home,” says Kevin Mitchell, chairman of the Business Travel Coalition in Radnor, Pa. “And I think people are finally beginning to [wake up].”
Airline officials visit Washington
Representatives of the major carriers were in Congress this week, urging action to discourage speculation in the oil markets. Some analysts blame that speculation for the almost doubling of the price of jet fuel in the past year.
The tax provisions of the Foreclosure Prevention Act, which consumer groups and labor leaders say amount to government handouts to big business, show how the credit crisis, while rattling the housing and financial markets, has created beneficiaries in the power corridors of Washington.
It also shows how legislation with a populist imperative offers a chance for lobbyists to press their clients’ interests.
This has proved especially true on the housing legislation, which many lawmakers and lobbyists view as one of the last opportunities before Congress grinds to a halt amid election-year politics.
In the Senate bill, the nation’s biggest home builders, some now on the verge of bankruptcy, won a provision that would let them claim millions in tax refunds by charging their current losses against the huge profits they made three or four years ago. Other struggling industries would benefit from this provision.
Sen. Christopher J. Dodd, Democrat of Connecticut, was the main author of the Senate bill meant to help homeowners.
(The ones who will really benefit from this are, like always, the corporations.
And guess who will pay for these tax breaks in the end? – The Infinite Unknown)
Tags: Airlines, American Airlines, automakers, bill, Businesses, Corporations, Economy, financial market, Ford, Foreclosures, General Motors, Goodyear Tire, Housing Bill, Lobbyists, Northwest Airlines, Rubber., Senate, Tax Breaks, tax provisions, Wall Street, Washington