It was the worst kept secret in the travel industry. For months analysts have been saying a Chapter 11 Bankruptcy for American Airlines was inevitable.
Tuesday it happened.
So what now for travelers? NOTHING. At least not for awhile. Read on --
The planes are still in the air. Your tickets will be honored. Your award miles in the "AAdvantage" program are still there. American is not going away.
You may even see some good deals on air fares. In the past, airlines going into bankruptcy have tried to counter the negative publicity by offering cheap tickets.
As for the airline itself, American faces major challenges in bankruptcy including getting concessions from its suppliers, creditors and employee unions. Still, this is hardly the first time a major US airline has gone into chapter 11.
In fact, American was the one of the only "majors" not to go through bankruptcy reorganization following September 11th. Remember? After the attacks no one wanted to fly. The airlines begged the federal government for help -- a bailout -- but President Bush and congress said, "No." There would be no bailout of the travel industry post 9-11.
If it had been up to me, I probably would have given them the bailout. Instead, most airlines went to bankruptcy court.
Gee, makes you wonder what would have happened if the auto industry had gone the bankruptcy route instead of taking (with the exception of Ford) a government bailout. (As Romney has suggested...)
Back on subject ... here's what's next:
Expect American Airlines to be in bankruptcy for more than a year. (Delta took two years to emerge from bankruptcy.)
One thing to watch for during this period is a merger.
It won't be Delta; it gobbled up Northwest. Nor will it be United which has just begun digesting Continental. Southwest? No way -- The two airlines may be both based in Texas and both fly planes, but they share nothing else in common.
So what's left as a possible mate for AA? My bet is on US Air.
Anything is possible, but I wish the people of American only the best. They will always have a special place in my heart. They were the first to come up with a customer loyalty program (if you don't count the old S&H green stamps). Such programs have now caught on with everybody from Marriott Hotels to Cafe Rio.
Don't you just love to hear them shout, "Free meal!"