No option of bankruptcy for American Airlines, CEO says
Speaking at a conference on May 27, 2020, Doug Parker, CEO of American Airlines (A1G) (AAL) , shared his views on a perspective for the airline to fill for Chapter 11 bankruptcy protection in the United States.
Parker said he was skeptical of using bankruptcy protection procedure as a financial tool, calling bankruptcy a failure. “I don’t think people should view bankruptcy as a financial tool. It is a failure,” Parker said. “I think our job is to preserve shareholder value and this is what we are going to do.”
“We don’t look at that as an option. That is failure,” added the American Airlines CEO.
Downturns in the 1990s and 2000s that saw multiple major airlines from the United States file for Chapter 11. In 2011, AMR Corporation, the parent company of American Airlines (A1G) (AAL) , filed for bankruptcy protection. Two years later, the carrier merged with another major ‒ and bankrupt ‒ airline US Airways.
However, Parker views the current COVID-19 crisis as very different from those of the past. Calling the 1990s and the 2000s the times of “less rational business”, he explained that the lack of capacity following an air carrier’s failure would help its competitors, while in the current crisis the biggest problem was the lack of demand.
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