AMR files for bankruptcy after labour talks fail

AMERICAN Airlines and its parent company AMR Corp filed for bankruptcy yesterday after failing to win a labour deal with pilots and suffering from mounting fuel costs.

AMR had been the only major US carrier to avoid bankruptcy in the past decade. Its rivals used bankruptcy to restructure their labour agreements and cut costs.

That left AMR, the third-largest US airline behind United Continental Holdings Inc and Delta Air Lines Inc, saddled with the highest labour costs in the industry and the only major airline still funding worker pensions.