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O’Hare Travel Likely To Be Spared By American Bankruptcy

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American Eagle

An American Airlines jet taxis past American Eagle jets at O’Hare International Airport on March 26, 2008. American Airlines canceled about 200 flights nationwide that day so they could inspect some wire bundles aboard their MD-80 aircraft. (Credit: Scott Olson/Getty Images)

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CHICAGO (CBS) — American Airlines is seeking Chapter 11 bankruptcy protection as it seeks to unload massive debt created by high jet fuel prices and labor problems.

American is the second-busiest carrier at O’Hare Airport, and experts say that the company will likely start cutting jobs and the number of flights. However, O’Hare will probably be spared significant schedule changes.

“American just can’t afford to cut back at O’Hare … when you lose market share, the whole ship can start sinking,” said DePaul University transportation expert Joe Schwieterman. American handles just under 40 percent of travelers at O’Hare.

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Schwieterman said the decline in business travel over the past few years hit American hard.

AMR Corp, the parent of American Airlines, was the only major airline to avoid bankruptcy after the Sept. 11 terror attacks.

“What’s really hurt American is that the business market has never bounced back,” Schwieterman said. “They designed the whole product around a bit of a fare premium about some high-end traffic and that’s never been strong enough.”

Fort Worth, Texas-based AMR Corp., along with its regional affiliate AMR Eagle Holding Corp., said Tuesday that they filed voluntary petitions to reorganize.

American says it sought protection to reduce its costs and debt to remain competitive. The airline said it will continue normal flight operations during the reorganization.

American says labor-contract rules force it to spend at least $600 million more than other airlines.

Besides higher labor costs, American also struggled with rising jet fuel costs. Jet fuel cost an average of $3 per gallon so far this year — a record according to government data that goes back to 1990.

American lost $162 million in the third quarter and has lost money in 14 of the last 16 quarters.

The airline operates out of five major hubs in New York, Los Angeles, Dallas/Fort Worth, Chicago, and Miami.

The Associated Press contributed to this report

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