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American Airline’s recent bankruptcy filing is not expected to impact the availability of cheap airplane tickets or cheap vacation packages in general or, according to American Airlines, its normal flight schedules, its ability to honor tickets, or its frequent flier program. American Airlines is the country’s third largest airline. In filing for Chapter 11 bankruptcy reorganization it is following the steps taken by most of its major competitors over the past decade in order to reduce its high debt and costs. Delta, Northwest, United and US Airways filed bankruptcy reorganization over the past decade as a means of reducing debt and costs, particularly labor and fuel costs. Currently wages and benefits for American’s union workers are higher as a percent of operating expenses than its competitors. At present American is the only major airline obligated to fund its employees’ pensions. American claims that it will continue normal business operations throughout the reorganization process with current management in place. Experts, on the other hand, expect big cuts resulting in fewer planes, employees and routes. American’s pilots union said that while American’s decision to file bankruptcy “was not entirely unexpected, it is nevertheless disappointing that we find ourselves working for an airline that has lost its way.” American deemed bankruptcy necessary in order to “achieve a cost and debt structure that is competitive in the airline industry.”
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