American Airlines Bankruptcy Rumors Premature

Posted on 4 October 2011

American Airlines PictureAirline employees and air travelers with tickets on American Airlines can seemingly breath a sigh of relief as the panic-driven crash of American Airlines (AA) parent company stock – that’s AMR folks – yesterday (3 October 2011) – seems to be an unwarranted and short term problem. We don’t normally report on airline finance and stock prices here at Airline Explorer but this event seemed worth a little ink.

The problem began with rumors of AMR contemplating bankruptcy protection, possibly so-called Chapter 11. American Public Media’s excellent program Marketplace reports that trading in the AMR stock was halted not once but seven times. Not a good day.

While the AMR stock fell as low as 41% off its prior price, it recovered a little to a fall of 33% reported the Wall Street Journal (WSJ). Today the skies are starting to clear.

In that same blog post, the WSJ shares two analyst’s perspectives on the stock that, while not glowingly optimistic, could fairly be characterized as modestly confident AMR, and by extension, American Airlines, will have the cash to pay its bills, as long as the economy does not get much worse, for the foreseeable future.

So if you work for American Airlines or are considering buying airline tickets to fly AA, things look like smooth-ish flying ahead… for now.

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