Yesterday AMR Corp., owner of American Airlines, has filed for Chapter 11 bankruptcy (receivership in the UK) in move to avoid bankruptcy and to gain time to to get back on their feet.

Meanwhile, in a statement tried to assuage fears saying the move won't affect American’s flight schedule or frequent flier programs. The airline promises its customers to implement its approximately 3,300 daily flights and abide by its obligations and stresses that the operation will continue as before.

Major airlines have dramatically cut labour and other costs in bankruptcy. In 2006, United Airlines, emerging from a three-year bankruptcy, cut pay, laid off 25,000 employees, parked 100 planes, dumped its pension plan and replaced it with a 401(k), reduced domestic flights and expanded internationally.

What does this mean for passengers and travellers who have booked tickets?
"Consumers who hold AA frequent flier miles should know that their miles are safe for now," said George Hobica, founder of the low-airfare listing site Airfarewatchdog.com told Fox news.

Those who have an existing ticket should not need to worry. Past air carriers who declared bankruptcy and their passengers remained unaffected.

What about my frequent-flier miles?
Frequent-flier miles have been protected in airline bankruptcies.

(to be updated)

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