Moneybox: Air Fail

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Moneybox Air Fail Blame Jimmy Carter for all the airline bankruptcies. Or better yet, thank him. By Matthew Yglesias Posted Thursday, Dec 01, 2011, at 08:51 PM ET American Airlines' parent company, AMR Corporation, filed for Chapter 11 bankruptcy protection on Tuesday, surprising exactly no one. A major corporate bankruptcy is normally a bit of a shock, but there's nothing shocking about bankruptcy in the American passenger air business, where filings are way more common than crashes. Frontier Airlines filed in 2008, Delta and Northwest both filed in 2005 (and later merged), and United and U.S. Airways filed in 2002 and then again in 2004. TWA went down in 2001 as part of an acquisition by the now-bankrupt American Airlines. Pan Am, of course, went out of business entirely 10 years before that, only to re-emerge as a short-lived television show about the glories of air travel in the era before constant bankruptcy. And those are only the big ones. All told there have been 189 airline bankruptcy filings in America since 1990. Why? You can blame Jimmy Carter for the bankruptcies. Or perhaps you ought to thank him. Airline bankruptcies are a bit unusual in that they're aimed more at labor unions than at creditors. American Airlines is certainly burdened by debts, but it's been a bad credit risk for long enough that most of its debt is "secured"—backed by physical assets like airplanes that can be repossessed if it tries to default. So there are some unsecured creditors who'll lose out, but the real aim of the filing, in the words of S&P 500 analyst Philip Baggaley is to ... To continue reading, click here. Join the Fray: our reader discussion forum What did you think of this article? POST A MESSAGE | READ MESSAGES Also In Slate Gingrich Is the Only Candidate Who Talks About How He'd Govern the Country. Good for Him. The Artist Is Slight but Enormously Likable and Destined To Win Awards Siri Gives Terrible Answers When You Ask About Abortion or Birth Control	Advertisement
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