American Airlines is now in Chapter 11 bankruptcy, but will continues flying as usual. Nothing will

American Airlines is now in Chapter 11 bankruptcy, but will continues flying as usual. Nothing will change to its flight schedule that would not have changed anyway. American will not shut down abruptly as Aloha Airlines did in 2008.
The difference is that Aloha Airlines was dependent on cash infusions from its major shareholder, an investment group in Los Angeles headed tours to grand canyon from las vegas by Ron Burkle. When secret negotiations tours to grand canyon from las vegas for Aloha to be acquired by United Airlines fell through, Burkle saw no margin in continuing the financial support and cut off the spigot. Aloha had only hours to try to line up some other backing and was not able to find it in time. Aloha was shut down abruptly because every potential acquisition or partnership it sought tours to grand canyon from las vegas required it to be an operating airline.
American has lost $10 billion in 10 years, and its biggest tours to grand canyon from las vegas creditors are its bondholders, but it has hundreds of millions in cash, enough to maintain smooth operations under the supervision of a bankruptcy judge, who has powers no chief executive ever did. If a vendor suddenly says, no credit, credit up front, the judge can compel service. If the judge approves, the airline tours to grand canyon from las vegas can back out of contracts, including labor agreements and the lease agreements on the older, gas-guzzling jets.
There was a round of major airline bankruptcies following 9-1-1, with United, Delta, Northwest and Continental, the four biggest carriers after American in those days, using receivership to renegotiate wages, pension and operating rules with their unions. American proudly avoided bankruptcy and was rewarded with the highest labor costs in the industry, even after negotiating concessionary contracts later. It filed for Chapter 11 after its pilots union rejected a contract offer and made it clear its pilots wanted cancellation of earlier concessions, not acceptance of new ones.
Hundreds of American Airlines employees live in Hawaii, most of them deadheading to work at bases on the mainland. They enjoyed higher wages than their brethren at rival airlines for the past tough years. Now they work for an airline which, like those other airlines before, will have the backing of a federal judge as it seeks a more competitive wage base. I hope their unions prepared them for this.