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American Files for Bankruptcy Protection; Now What?

It was really only a matter of time, and this morning that time has come: American Airlines has filed for Chapter 11 bankruptcy protection. The last major airline bankruptcy filing came in 2005, when Delta reorganized under Chapter 11 protection; it exited bankruptcy two years later. Prior to that, most other U.S. carriers—except American—filed in the wake of the 9/11 terrorist attacks.

Not surprisingly, American cites rising fuel costs and restrictive labor rules as the main culprits for its financial woes. The AP reports that American has lost money in 14 of the last 16 quarters, including a $162 million hit in the third quarter of this year.

So those are the financial facts. But you may be wondering what all of it means for travelers—especially if you have a flight already booked with American, or if American is your airline of choice for miles.

The short version: Nothing changes.

The longer version: Nothing changes right now. American will continue to operate under “business as usual” conditions, which means your tickets are still valid and your miles will still work. American will, at some point, emerge from bankruptcy. There may be some passenger-facing changes at that point—there’s always the potential for a reduced or otherwise changed route map, a restructured mileage program, and perhaps even a merger with another airline—but in the immediate future don’t expect any disruptions.

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