American Airlines will continue business as usual in Latin America

American Airlines will continue business as usual in Latin America

American Airlines has filed for bankruptcy protection but this will not impact its flights to Latin America, according to the company and industry experts.

On Tuesday, AMR Corporation, the parent company of American Airlines and American Eagle, filed a voluntary petition for Chapter 11 reorganization “in order to achieve industry competitiveness” and “assure [the company’s] long-term viability,” according to an official press release from the company.

American Airlines Latin American route system encompasses 46 destinations in 17 countries.

“Our customers will see no immediate change as a result of the filing, and can be confident that they can continue depending on us,” said Martha Pantin, director of American Airlines corporate communications for Latin America and the U.S. Hispanic market in an email. “We are flying our regular schedules, and we will continue to honor tickets and reservations, and make exchanges and refunds as usual; fully maintain our AAdvantage and other customer service programs; and pay our suppliers for goods and services received after the filing.”

Patin also said that American Airlines Latin American operations will even expand with daily flights to Belo Horizonte and Brasilia scheduled to start in December.

“The last thing they want to do is hurt their higher-margin ticket prices to Latin America,” said Rick Seaney, CEO of Dallas-based Farecompare.com in a phone interview with Univision News. “I would expect [American Airlines] to cut U.S. domestic routes, and some of those cuts will actually be replaced with higher-margin Latin American routes.”

For Seaney, increases in airfares will also depend on higher oil prices.

Another factor that could affect American Airlines services and ticket prices could be potential worker strikes due to contract negotiations with the labor unions, which are part of the bankruptcy process.

American Airlines is the only major U.S. airline that hasn’t gone through a Chapter 11 reorganization. Delta Air Lines and United Airlines emerged from bankruptcy with lower costs, reported The Wall Street Journal.

After American, Continental (now part of United Airlines), and Delta are the U.S.-based airlines with the highest traffic of Latin American passengers, according Seaney.

American's restructuring process could become a market opportunity for them.

“Latin America is likely one of the growth areas for these airlines and they’ll continue to seek added seat supply because it’s an area where ticket prices are usually much higher than domestic ticket prices,” said Seaney. “And you have growing Latin American economies with more people moving into the middle class that can afford airline tickets.”