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2011 Archives

American Airlines parent seeks bankruptcy protection .


The following ran on the Nov. 29, 2011 broadcast for WFAA. Finance professor Michael Davis provided expertise for this story.

December 9, 2011

By Byron Harris

D/FW AIRPORT  — It's a decision that impacts 80,000 employees and leaves millions of travelers wondering: What's next?

American Airlines' parent company AMR filed for bankruptcy protection Tuesday morning.

The announcement has been rumored for weeks, as negotiations over labor contracts seemed to stall. The skyrocketing price of jet fuel may also figure into the equation. But the company maintains there is no single factor behind its decision...

"American's labor costs are about 28 percent of revenues," explained SMU economist Mike Davis. "Most of the other airlines have a cost of about 20 percent of revenues. It's a huge difference between American and the other airlines."


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