Commercial bankruptcy of airline may affect pilots in New Jersey

On Behalf of | Sep 14, 2012 | Business & Commercial Bankruptcy |

Readers in New Jersey may be aware that one of our nation’s largest airlines took a step closer to being able to exit bankruptcy recently. American Airlines’ parent company AMR Corp. filed for commercial bankruptcy protection, Chapter 11, last November. At that time, the company reported that it had lost more than $10 billion since 2001.

The recent ruling in the commercial bankruptcy case came when a court allowed AMR Corp. to void its pilots’ union contract. This, the company told the court, would allow them more flexibility in the necessary restructuring of the airline. The ruling will affect the 7,500 active pilots that work for the airline.

The company has reported that it has begun to show a small profit in recent months due to cutting certain expenses through the bankruptcy. Though small in comparison to the overall goal, the new profits, along with newly negotiated union contracts for many of its employees, may go a long way to helping the airline recover. In addition, there are indications that the company may wish to merge with US Airways, which would place US Airways and American Airlines together as a top competitor in the airline industry.

Like many commercial bankruptcy filings in New Jersey, the airline in this case sought the protections of the bankruptcy court to help slow the demands of creditors while it restructured. The time that a bankruptcy offers can give a company time to rebuild in a better way that will help it to grow profits and eliminate debt. When this is successful, a business can emerge from the bankruptcy process with a new, fresh financial start that will help it soar into the future.

Source:, “Bankruptcy judge throws out AMR pilots’ contract,” Scott Mayerowitz, Sept. 4, 2012


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