By Keith Laing - 11/29/11 02:39 PM EST
One of the largest airlines in the country, American, filed for bankruptcy Tuesday morning, its parent company announced.
Texas-based AMR Corp., which oversees both American and American Eagle airlines, said it had begun bankruptcy proceedings at the U.S. Bankruptcy Court for the Southern District of New York.
“This was a difficult decision, but it is the necessary and right path for us to take — and take now — to become a more efficient, financially stronger and competitive airline," AMR President Thomas Horton, whom the airline announced will take over for CEO Gerard Arpey, said in a statement.
“But as we have made clear with increasing urgency in recent weeks, we must address our cost structure, including labor costs, to enable us to capitalize on these foundational strengths and secure our future," Horton continued. "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 given the accelerating impact of global economic uncertainty and resulting revenue instability, volatile and rising fuel prices, and intensifying competitive challenges."
According to the Department of Transportation's Bureau of Transportation Statistics, American Airlines has lost $382 million in 2011, despite bringing in more than $11 billion for the year. The airline carried 43 billion domestic passengers through August of this year and more than 8 billion international travelers through May.