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Shares In American Airlines' Parent Company Sink
As fears spread that American Airlines may be headed for bankruptcy proceedings, shares in the airline's parent company, AMR Corp., plummeted by 41 percent before closing at $1.98 Monday — a 33 percent drop in its value.
The stock hadn't closed below $2 since 2003, according to the Associated Press.
The volatile drop was so steep that trading in AMR shares on the New York Stock Exchange was halted seven times, according to The Chicago Tribune. The NYSE halts trading on companies whose stock drops by more than 10 percent in five minutes.
The Tribune quotes an AMR rep:
AMR spokesman Andrew Backover acknowledged the speculation but declined to say whether AMR was considering Chapter 11.
"Regarding rumors and speculation about a court-supervised restructuring, that is certainly not our goal or our preference," he said. "We know we need to improve our results, and we are keenly focused as we work to achieve that."
Although AMR typically does not comment on its stock prices, Backover noted "there is no company-driven news that has caused the volatility in AMR shares today."
Analysts say the company's shares were also driven down by an expectation that airline travel would slump this fall. And in a broader sense, worries over Europe's debt crisis and an upcoming U.S. jobs report brought a day of broad market declines.
Earlier this year, American Airlines announced what it called "the largest aircraft order in history," in a plan to buy 460 new fuel efficient, narrow-body aircraft from Boeing and Airbus, with the airline taking delivery between 2013 and 2022.