American Airlines filed for bankruptcy in order to cut labor costs in an era of high fuel prices and decreased travel demand.
American plans to operate normally while in bankruptcy, but the Chapter 11 filing could punch a hole in the pensions of roughly 130,000 workers and retirees. It is said that they have adequate cash reserves to get through this. Shares closed tuesday at 26 cents, typical of bankrupt companies while rival companies' (such as Delta and United) shares boosted as competition went down.
This follows the Australian airline company who filed for bankruptcy. It is important to note the correlation of fuel prices not only on cars and car purchasing habits, but also on the airlines.
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