American plans to operate normally while in bankruptcy, but the Chapter 11 filing could punch a hole in the pensions of roughly 130,000 workers and retirees.

AMR pension plans are $10 billion short of what the carrier owes, and any default could be the largest in U.S. history, government pension insurers estimated.

“They were proactive,” Neidl said. “They should have adequate cash reserves to get through this.”

Ray Neidl, aerospace analyst at Maxim Group, said a lack of progress in contract talks with pilots tipped the carrier into Chapter 11, though it has enough cash to operate. The carrier’s passenger planes average 3,000 daily U.S. departures.
In its bankruptcy petition filed in Manhattan, AMR reported assets of $24.72 billion and liabilities of $29.55 billion. The company has $4.1 billion in cash.

One bankruptcy rule is “don’t wait too long,” Harvey Miller, a partner at Weil, Gotshal & Manges representing AMR, said at a court hearing. “Don’t wait until the course is irreversible. That is what American Airlines is doing today.”

AMR’s bankruptcy filing showed few details about how the company would proceed, said Stephen Selbst, a bankruptcy attorney with Herrick Feinstein in New York.

“It’s possible they are still in negotiations and don’t want to put something on paper that might prejudice those negotiations,” he said.

Experts believe AMR stands to save billions by restructuring its obligations in bankruptcy.