TRAVERSE CITY — Travelers who fly American Airlines in and out of Cherry Capital Airport should not be affected by the airline's decision to file for bankruptcy protection.
American's parent company filed for bankruptcy protection Tuesday amid attempts to cut costs and unload massive debt built up by years of high fuel prices and labor struggles. The company likely will cut its flight schedule "modestly" while it reorganizes, but there are no foreseen local changes.
"At this moment, I don't anticipate any effect on anything here in Traverse City as we've been through bankruptcy with other airlines before," said Kevin Klein, director of the Traverse City airport.
American Eagle, the company's regional carrier, makes four daily flights in and out during the winter season and up to eight flights into and out of Chicago during the summer, when it also offers weekend service to New York. That accounts for about 19 percent of the airport's passenger travel, the third most of the three carriers that operate in Traverse City. Delta Airlines carries 56 percent of local passengers, and United carries 25 percent, Klein said.
Klein had not yet been officially contacted by American by Tuesday around noon, but he does not expect local service changes.
"Everything should remain the same. We feel it's just a restructuring agreement for American," he said.
AMR Corp. has continued to lose money while other U.S. airlines returned to profitability in the last two years.
American said its CEO Gerard Arpey stepped down and was replaced by company president Thomas W. Horton. Horton said the board of directors unanimously decided to file for bankruptcy after meeting Monday in New York and again by conference call on Monday night.
American said its frequent-flier program would not be affected.
Horton said, however, that as the company goes through a restructuring it will probably reduce the flight schedule "modestly," with corresponding cuts in jobs.
The company will delay the spin-off of American Eagle, which was expected in early 2012. AMR Eagle Holding Corp. also filed for bankruptcy.
American was one of the last major U.S. airline companies that had avoided bankruptcy. Others filed for bankruptcy protection in the aftermath of the 2001 terrorist attacks that triggered a deep slump in the airline industry. The last major airline to file for bankruptcy protection was Delta in 2005.
The Associated Press contributed to this report.
