AA boss attacks Chapter 11 law

American Airlines boss Gerard Arpey has turned on his own government’s bankruptcy protection law, which, he says, distorts competition and keeps ailing carriers in business.

His remarks, which echo longstanding criticism from BA, come at a time when American and BA are seeking to forge stronger ties.

Speaking from American Airline’s headquarters at Fort Worth, Texas, Arpey tore into the way rival US airlines exploit Chapter 11 bankruptcy protection, saying: ‘Under Chapter 11, companies can legally renege on their commitments to repay money or meet the terms of their contracts, so they can produce immediate cost savings and create a cost structure that can be difficult to compete with. Chapter 11 is used to perpetuate capacity that has failed.’

The Guardian