AMR Corp. (AMR) Files for Chapter 11 Bankruptcy

Shares of AMR Corp. (NYSE: AMR) are plunging in morning trade Tuesday after the parent company of American Airlines and AMR Eagle Holding Corp. voluntarily filed petitions for Chapter 11 reorganization in New York. The company said the move will help "achieve a cost and debt structure that is industry competitive and thereby assure its long-term viability and ability to continue delivering a world-class travel experience for its customers..."

During the Chapter 11 process, AMR said it will continue to:

• Provide safe and reliable service;
  
• Fly normal schedules;
  
• Honor tickets and reservations, and make exchanges and refunds as usual;
  
• Fully maintain AAdvantage frequent flyer and other customer service programs, and ensure all AAdvantage miles and elites status earned by members remain secure and intact;
  
• Provide Admirals Club access and similar amenities to members and eligible customers;
  
• Remain an integral member of the oneworld® alliance, of which American is a founding member, and continue its codeshare partnerships;
  
• Provide employee wages, healthcare coverage, vacation, and other benefits, without interruption; and
  
• Pay suppliers for goods and services received during the reorganization process.

AMR shares last traded at $0.62, down a dollar, or about 60 percent from Monday's closing price.

Traders in the Airline sector appear to be taking the move positively. Watch: Delta (NYSE: DAL), UAL (NYSE: UAL), Southwest Air (NYSE: LUV), US Airways (NYSE: LCC), JetBlue (Nasdaq: JBLU) and Alaska Air (NYSE: ALK).

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