American Airlines, and its parent company AMR, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court on Tuesday.
The company made the move to "become a more efficient, financially stronger, and competitive airline," Thomas Horton, Chairman and CEO of AMR and American Airlines said in a release. As part of the transition, former Chairman and CEO Gerard Arpey will retire, and will be succeeded by Horton.
The Texas-based airline plans on "conducting normal business operations" while it restructures its debt and other obligations, it said in a release. To that end, flights are expected to continue as normal on Tuesday, while the reservations and customer service departments will conduct business as usual as well.
AMR posted a third-quarter loss of $162 million in October, and currently has $4.1 billion in cash and unrestricted investments on hand. Shares plunged 58% to 64 cents in pre-market trading.
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