One year later, with eight new labor contracts in place and after 5,500 court filings, AMR Corp. is getting closer to emerging from bankruptcy.
Industry analysts say the carrier will likely complete its restructuring by next spring, although it's still unknown whether American Airlines will remain a stand-alone airline or merge with suitor US Airways.
American has agreed to new labor deals that will save it hundreds of millions of dollars annually and has terminated expensive leases on gas-guzzling planes that were too costly to fly. The carrier has increased its average fares and maintained its cash balance at $4 billion throughout the restructuring.
But as the airline hits the one-year anniversary of its bankruptcy filing, analysts say management missed opportunities to dramatically change the Fort Worth company and its cost structure.
While pensions are frozen and employees and retirees are paying more for healthcare benefits, the labor contracts still don't give American enough flexibility to compete with bigger rivals United and Delta, analysts say.
"American, in my view, didn't differentiate themselves enough from the industry," said Bill Swelbar, an airline researcher at the Massachusetts Institute of Technology.
"There was a chance for radical surgery and instead they did selective surgery."
When AMR filed for bankruptcy Nov. 29, 2011, the company had $4.1 billion in cash, so it did not need debtor-in-possession financing to continue operating.
Tom Horton, who was named chief executive that day when Gerard Arpey resigned, quickly went to work on the carrier's balance sheet, terminating leases at airports it no longer used and rejecting contracts on older airplanes parked in the New Mexico desert.
In February, Horton unveiled a restructuring plan intended to improve AMR's finances by $3 billion a year, with $1 billion in increased revenue and $2 billion in reduced costs, including restructured debt and employee-related cuts.
"We have completed really the vast majority of the financial restructuring," Horton said in October. "The savings we have achieved from those things have exceeded what was built in the original plan."
AMR's monthly unit revenue has steadily improved since the spring, and the carrier has signed new regional feed contracts with SkyWest and ExpressJet.
Recently, it renegotiated its financial contract with BNDES, the Brazilian Development Bank, on its 216 Embraer aircraft, giving AMR more flexibility on how it will operate the smaller regional jets.
In its most recent financial report, AMR said it improved its revenue by 0.8 percent to $6.4 billion in the three months that ended Sept. 30 as average fares paid by customers grew 3.5 percent.
However, the carrier posted a $238 million third-quarter loss, mostly from charges related to reorganization items and severance costs for buyouts. Without the charges, AMR would have made a profit of $110 million.
Since United Airlines, Delta Air Lines and Northwest Airlines all went through bankruptcy a few years ago, Horton and his team benefited by following the same game plan, said Greg Charleston, senior managing director at Conway MacKenzie.
"They have followed the blueprint to a T and accomplished a lot in one year," Charleston said. "I give them a lot of credit."
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