LEAD: American Airlines files for bankruptcy

Nov 29, 2011, 19:28 GMT

New York - American Airlines, the United States' third-largest airline, said Tuesday it had filed for bankruptcy in a New York court.

The move allows the carrier to reorganize its assets in an attempt to become more competitive, while winning protection from creditors.

'This was a difficult decision,' said Thomas W Horton, chairman, chief executive and president of AMR Corporation, the airline's parent company. '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.'

He said the company would focus on cost structure, specifically labour costs, in an attempt to control expenditures.

'Our very substantial cost disadvantage compares to other larger competitors, all of which restructured their costs and debts through Chapter 11 (the US bankruptcy procedure), 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,' Horton said.

American is following in the steps of other major US airlines, several of which have claimed bankruptcy in the last 10 years as the US air travel industry has been buffeted, first by fears of terrorism following the September 11, 2001 attacks, and then by the global financial meltdown.

Some analysts said the company's failure to file for bankruptcy earlier is one of the reasons for its market share slipping.

The airline said in a statement that its flight operations would continue as normal.