American was, for many years, a bankruptcy waiting to happen. They pushed it off and pushed it off while they lost money and their competitors drove down costs through what Donald Trump refers to as “the Chapters.”
They lost control of the process though and wound up being taken over by US Airways rather than emerging independent. Time and again American management expressed a desire to emerge independent and then consider any merger. For all the time American spent waiting to enter Chapter 11, they still had plenty of cash on hand and an ability to meet their creditor obligations — though not a long run likelihood of returning to profitability.
One irony is that if they had waited longer they probably could have emerged independent. A year or so longer and the would have been in bankruptcy while fuel prices were dropping, they would have turned profitable and legacy management might have remained in place. However, three things happened:
