American Airlines shares slump on bankruptcy speculation
Shares in American Airlines’ parent company slumped 33 percent overnight on fears the airline may have to seek bankruptcy protection.
At one point shares in AMR fell by as much as 41 percent in New York sparking automatic halts in trading, BBC reported.
American Airlines, a oneworld partner of Qantas and British Airways, is the third largest carrier in the US but has been struggling with high debt loads and sluggish demand.
A spokesman said a Chapter 11 bankruptcy “is certainly not our goal”.
American Airlines is expected to post its fourth straight year of losses in 2011, and analysts expect that to continue into 2012.
It’s one of the few major carriers not to have restructured in a Chapter 11 bankruptcy, leaving it with higher costs and debts than competitors.
Australia’s competition watchdog, the ACCC, last week gave final approval for a transpacific alliance between Qantas and American Airlines.
The airlines will coordinate operations on services between Australia/New Zealand and the United States and on their respective services which support these transpacific routes.
Ian Jarrett
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