By Sarah de Sainte Croix, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – On Monday, AMR Corporation, the parent company of American Airlines, announced that it had filed for a voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code, while reassuring customers that business was expected to continue as normal.
According to information from the United States Federal Courts, the usual procedure under Chapter 11 is for the debtor to propose a plan of reorganization that enables the business to stay alive and to pay its creditors over time.
The company flies to six destinations in Brazil (Rio, São Paulo, Belo Horizonte, Brasilia, Salvador and Recife) from three U.S. cities – New York, Dallas and Miami. In June 2012, Manaus will be included in the list.
With seventy round-trip flights between the U.S. and Brazil, American Airlines is a leader in the transportation of passengers between the two countries, with 31.9 percent market share, followed by TAM (29.7 percent).
A statement released to the press explained, “American took this action in order to achieve a cost and debt structure that is competitive in the airline industry so that it can continue delivering a world-class travel experience for its customers.”
Monday brought many changes for the troubled airline as they also announced the retirement of chairman and CEO, Gerard Arpey. On the same day they welcomed in his replacement, Thomas W. Horton, who was promoted from his position as President of AMR and American.
Horton said, “This is a difficult business in the best of times … It is a privilege and an honor to lead this company and I intend to do everything in my power to help restore its position of leadership in the global airline industry.”
Read more (in Portuguese).
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