American Airlines' parent company AMR Corporation has filed for Chapter 11 bankruptcy¹ protection.

美国航空总公司美利坚航空公司根据破产法第11章申请破产保护。

Shares in the airline plunged² immediately they resumed trading on Tuesday and closed 81% down. They are now worth 31 cents each.

The company expects the airline to continue to operate as normal throughout the bankruptcy process.

Speculation³ about AMR's financial position surfaced in recent weeks after cost-cutting negotiations⁴ failed.

AMR said agreements with its workforce⁵ forced it to spend $600m (£384m) more than other airlines on staff costs.

The airline employs 78,000 staff worldwide and operates out of five major US hubs.

Chapter 11 refers to a section of the US Bankruptcy Code. It protects a company from its creditors⁶, giving it time to reorganise its debts or sell parts of the business.

American Airlines was the only one of the major US airlines operating international routes not to file for bankruptcy after the September 11th terrorist attacks.

Its competitors have successfully used bankruptcy to restructure their labour contracts and cut costs.

Changes at the board

The company also announced that Gerard Arpey, the Chief Executive of AA has retired⁷ and would be replaced by the company's president, Thomas Horton.

Mr Horton said the board had unanimously（全体一致地） decided⁸ to file for bankruptcy on Monday night.

He announced that American would be looking to change its employees' terms and conditions. "We plan to initiate⁹ further negotiations with all of our unions to reduce our labour costs to competitive levels," he said.

David Bates, president of the Allied¹⁰ Pilots Association conceded that employment terms would change. "The 18-month timeline allotted¹¹ for（拨给） restructuring will almost certainly involve significant changes to the airline's business plan and to our contract."

Mr Horton insisted that the company would emerge in more robust¹² health: "I am confident American will emerge even stronger as a global leader known for excellence¹³ and innovation."

He added that during the restructuring the airline would reduce its flight schedule in the US "modestly" with a corresponding reduction in staff.

Mr Horton said no single factor had led to the decision to file for Chapter 11 but the company needed to cut costs. He pointed¹⁴ to weak demand and high fuel prices, which have risen more than 50% in the last five years.