American Airlines’ stock dropped 33.1 percent by the end of the day to $1.98 a share on rumors the company could file for bankruptcy, which the company adamantly denied. After over 100 pilots took early retirement for second month in a row, many people are beginning to doubt the ability of American Airlines to maintain it’s current schedule and position. Many of these pilots are senior pilots who fly the higher margin international routes.
American Airlines, the country’s third largest airline, based in Fort Worth, Texas, is thought to be the only major airline that lost money this year. AMR is the parent company of American Airlines and American Eagle Airlines. American and American Eagle have about 88,500 full-time and part-time employees worldwide, according to the company.
Analysts have long-noted the possibility of American Airline’s bankruptcy in research notes, which might have influenced Monday’s decline in the company’s share price, according to Reuters. Other sources are highlighting the inability of management to reach agreements with any labor groups and the increasing number of employees taking early retirements.
The company denied the rumors, and last month said the pilot retirements would not lead to cancelled flights. Sources say that AMR has asked pilots for relief on work rules in order to meet the flying schedule.
“While we generally don’t comment on AMR’s share price performance, there is no company-driven news that has caused the volatility in AMR shares today,” a spokesman said in an emailed statement. “The pause in trading of AMR shares was due to automatic triggers established by the New York Stock Exchange (under Rule 80C) that pause trading based on share price volatility.
“Regarding rumors and speculation about a court-supervised restructuring, that is certainly not our goal or our preference. We know we need to improve our results, and we are keenly focused as we work to achieve that,” the company said in its statement.