American Airlines files for bankruptcy protection; most travellers won't be affected Read it on Global News: Global News | American Airlines files for bankruptcy protection; most travellers won't be affected

DALLAS - The parent company of American Airlines filed for bankruptcy protection Tuesday, seeking relief from crushing debt caused by high fuel prices and expensive labour contracts that its competitors shed years ago.

The company also replaced its CEO, and the incoming leader said American would probably cut its flight schedule "modestly" while it reorganizes. The new CEO, Thomas W. Horton, did not give specifics.

For most travellers, though, flights will operate normally and the airline will honour tickets and take reservations. American said its frequent-flier program would be unaffected.

AMR Corp., which owns American, was one of the last major U.S. airline companies that had avoided bankruptcy. Rivals United and Delta used bankruptcy to shed costly labour contracts, reduce debt, and start making money again. They also grew through mergers.

American — the nation's third-largest airline and proud of an 80-year history that reaches back to the dawn of passenger travel — was stuck with higher costs that meant it lost money when matching competitors' lower fares.

In announcing the bankruptcy filing, AMR said that Gerard Arpey, 53, a veteran of the company for almost three decades and CEO since 2003, had retired and was replaced by Horton, 50, the company president.

Horton said the board of directors unanimously decided on Monday night to file for bankruptcy. In a filing with federal bankruptcy court in New York on Tuesday, AMR said it had $29.6 billion in debt and $24.7 billion in assets.

With reductions to the flight schedule, Horton said there would probably be corresponding job cuts. American has about 78,000 employees and serves 240,000 passengers per day.

AMR's move could also trigger more consolidation in the airline industry. Some analysts believe American is likely to merge with US Airways to move closer to United Continental Holdings Inc. and Delta Air Lines Inc. in size. Such a merger would leave five large U.S. airlines compared with nine in 2008.

US Airways declined to comment.

American will delay the spinoff of its regional airline, American Eagle, which was expected early next year.

AMR, however, wants to push ahead with plans to order 460 new jets from Boeing and Airbus and take delivery of more than 50 others already ordered. New planes would save American money on fuel and maintenance, but the orders will be subject to approval by the bankruptcy court.

Analysts said all airlines will benefit if American reduces flights — especially if the cutbacks are more severe than American's new CEO is letting on. They said the chief winners were likely to be United and Delta, which compete for the same business travellers and have global networks like American's.

The losers will be American Airlines employees and AMR stockholders.

Shareholders almost certainly will be wiped out. The stock had already lost 79 per cent of its value this year on fears of bankruptcy. The stock fell to 26 cents Tuesday, down $1.36 from the day before. In January 2007, after a 4-year rally, the shares peaked at $41.

AMR has lost more than $12 billion since 2001, and analysts expect it will post more losses through 2012. Speculation about an AMR bankruptcy grew in recent weeks as the company was unable to win union approval for contracts that would reduce labour costs. The company said it was spending $600 million more a year than other airlines because of labour-contract rules — $800 million more including pension obligations.

On Tuesday, Horton said no single factor led to the bankruptcy filing. He said the company needed to cut costs because of the weak global economy, a credit downgrade that raised borrowing costs, and high, volatile fuel prices. The price of jet fuel has risen more than 60 per cent in the past five years.

Expectation of a bankruptcy filing increased in November as contract talks with the pilots' union stalled and union leaders rejected a company offer without sending it to members for a vote.

Ray Neidl, an analyst with Maxim Group LLC, an investment banking company, said AMR was wise to file for bankruptcy while it still had about $4 billion in cash. That way, the company will have a cushion to keep operating without worrying immediately about lining up new financing, he said.

Fitch Ratings analyst Bill Warlick said American will focus on shuttering pension plans and getting wage concessions from workers. Both Neidl and Warlick said American might be pushed into a merger with US Airways because size and global networks are more important than ever in the airline business.

Darryl Jenkins, a consultant who has worked for the major airlines, said, "American will still be with us in one form or another 10 years from now." But, he said, its workers will "take a major hit. Their pensions are in danger."

Union leaders expressed unease.

James C. Little, president of the Transport Workers Union, which represents mechanics, baggage handlers and other ground workers at American, was harsh in his assessment of the impact on labour.

"This (bankruptcy) is likely to be a long and ugly process and our union will fight like hell to make sure that front line workers don't pay an unfair price for management's failings," Little said.

AMR, which has headquarters in Fort Worth, Texas, lost $162 million in the third quarter and has lost money in 14 of the past 16 quarters.

The company barely escaped bankruptcy in 2003, when it was still reeling from the drop in air travel caused by a recession and the September 2001 terror attacks. That downturn helped drive United, Delta and US Airways into bankruptcy while American used the threat of a filing to wring wage and benefit concessions from workers.

American was founded in 1930 from the combination of many smaller airlines. Its hubs are in New York, Los Angeles, Dallas-Fort Worth, Chicago and Miami. Major international partners include British Airways and Japan Airlines.

News of the bankruptcy swept through AMR's hometown.

"American Airlines is an institution in Dallas-Fort Worth, and when institutions start to crumble, you look at everything around you," said Elaine Vale, a jewelry store owner who flew back from a Thanksgiving holiday on American. "After American, then who?"

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Airline writers Samantha Bomkamp in New York and Joshua Freed in Minneapolis, and Danny Robbins in Fort Worth contributed to this report.

Justice Kumar to head NRI commission

Chandigarh, November 29

Chief Minister Parkash Singh Badal today approved the constitution of Punjab State Commission for NRIs and appointed Justice Arvind Kumar (retd) as its chairman.

A Punjab Government spokesman said the Chief Minister also approved the appointment of Jagtar Singh of Hoshiarpur as the commission’s member. He said Badal also approved the appointment of Makhan Singh of Ferozepur as a member of the Punjab Subordinate Services Selection Board.

Meanwhile, the Chief Minster also appointed Sampuran Singh and Hardeep Singh, both Fazilka residents, as members of the Board of Directors, Pepsu Roadways Transport Corporation. 

Climate Conference 2011: Canada Says Kyoto Protocol 'Biggest Blunder,' May Withdraw

Global climate talks got an inauspicious start in Durban, South Africa, on Monday with reports that Canada planned to withdraw fully from the Kyoto Protocol, a carbon-limiting multinational treaty first adopted in 1997 and scheduled to expire in 2012.

Canada had already signaled that it would take a hard stance at the Durban talks, where negotiators from around the world are hoping, among other things, to extend the Kyoto agreement with a new phase of emissions reduction commitments. But the suggestion that Canada also planned to abandon its commitments under the original Kyoto protocol, which the nation appears unlikely to meet in any case, was met with deep disappointment by advocates for climate action assembled at the conference.

"Canada has been very clear that it would not be taking on a second commitment period," said Tasneem Essop, the provincial minister of environment, planning and economic development in the South African province of Western Cape and the head of the delegation for the environmental group WWF. "But abandoning the first commitment period would mean that Canada will have absolutely no integrity in the international arena.

"I believe that there will be a backlash against Canada," Essop added in a phone call. "The NGOs are very angry about this news, and Canada will have to do a lot of hard work to regain credibility."

A report on Sunday by the Canadian broadcast network CTV suggested that the Canadian government, under the leadership of conservative Prime Minister Stephen Harper, had planned to make an announcement on the nation's withdrawal from Kyoto "a few days before Christmas." Speaking to reporters on Monday, Canadian representatives neither confirmed nor denied reports of its withdrawal plans, though the nation's environment minister, Peter Kent, asserted in no uncertain terms that "Kyoto is the past."

In a transcript of the press conference provided to The Huffington Post by a spokesman for the environment ministry, Kent also described Canada's participation in the Kyoto agreement as the folly of his government's predecessors. "Our government believes that the previous Liberal government signing on to Kyoto was one of the biggest blunders they made," Kent said, "particularly given they had no intention of fulfilling that commitment."

The Kyoto agreement -- which grew out of the United Nations Framework Convention on Climate Change and was adopted in Kyoto, Japan, 14 years ago -- bound more than three dozen industrialized countries to reduce emissions of certain greenhouse gases by a given percentage, averaging just over 5 percent, over 1990 levels. The protocol was to take effect only after at least 55 countries, representing 55 percent of global CO2 emissions, had ratified the document. Those conditions were fully met in 2004, and the treaty was entered into force in early 2005.

The emissions reductions were to be achieved between 2008 and 2012, the period during which countries would be required to report their progress. Developing nations were not required to make significant reductions, and the United States, accounting for nearly a quarter of global greenhouse gas emissions and by far the largest global per capita emitter, refused to participate.

Europe has made up the bulk of the emissions reductions, and collectively, industrialized countries are on track to achieve the Kyoto goal of reducing their emissions by at least 5.2 percent over 1990 levels. This is true even when including U.S. emissions, which have increased by more than 10 percent over 1990 levels, according to an analysis of global emissions inventories published in September by the Netherlands environmental ministry.

But much of the decrease in emissions is attributed to the collapse of East European and Russian economies in the post-Soviet era, as well as to the current global recession, which has helped to reduce industrial output and overall energy use in many countries. Establishing a second phase for the Kyoto protocol, which officially expires at the end of next year, is a primary goal for negotiators gathered in Durban over the next two weeks -- although significant stumbling blocks make that outcome uncertain.

The United States -- and increasingly, Canada -- are among rich nations that have argued that developing countries like China must formally agree to emissions reductions of their own before a truly global and binding climate treaty can be reached. Short of that, they argue, industrialized economies are unduly hobbled, while powerhouses of the developing world, which are expected to account for an increasing share of global emissions, are able to grow and pollute with abandon.

Developing nations counter that the U.S., Europe and other developed countries became rich through profligate use of inexpensive and CO2-intensive energy sources like oil, coal and natural gas, and that they are to blame for the current build-up of greenhouse gases now warming the planet. They also suggest that it is unfair to ask poor nations to avoid use of inexpensive fossil fuels at precisely the time when they are poised to repeat the economic growth enjoyed by the rich world over the last century.

A $100 billion Green Climate Fund, first posited at the failed climate talks in Copenhagen in 2009, is designed to provide financial assistance to developing nations in their efforts to combat climate change, and establishing an architecture and funding for the trust is among the many goals of the Durban talks. But signs emerged even before negotiations got underway that progress on that front might also prove difficult.

Global greenhouse emissions, meanwhile, continue to rise, and even some participants in the first phase of Kyoto are expected to fall short of their goals under the agreement. This includes Canada, which had pledged to reduce greenhouse gas emissions by 6 percent compared to 1990 levels. Canada's most recent inventory of greenhouse gas emissions, submitted to the United Nations earlier this year, showed that while the country had been making year-over-year reductions since 2008, its emissions are still nearly 20 percent higher than they were in 1990.

Critics in large part blame increased development of the tar sands, a vast and contentious deposit of sand, clay and oil in northern Alberta. The Canadian government has expressed strong support for stepped-up exploitation of the tar sands, which they view as an economic boon. But opponents have argued that the carbon footprint associated with such an expansion would permanently cripple global efforts to get global warming under control.

"What's astonishing is watching Canada emerge as a rogue among developed countries," said Bill McKibben, the author and activist who has spearheaded a grassroots movement aimed at combatting a pipeline proposal designed to deliver some 700,000 barrels of oil each day from the tar sands to refineries and ports on the Texas Gulf Coast. "Of course, they have no choice but to ditch serious climate policy if they want to develop the tar sands in a big way -- and that pool of gunky oil is clearly the tail wagging the dog up there."

Kanimozhi gets bail from HC after six-month stay in Tihar jail

After six months in Tihar jail and five attempts, DMK patriarch M Karunanidhi's daughter Kanimozhi and four others got bail in the 2G case from the Delhi High Court on Monday.
Justice VK Shali of the high court said in his 39-page order that Kanimozhi and the four were on a "better footing" and deserved the benefit on the ground of "parity" with the five telecom executives released last week by the Supreme Court.
The court also considered the fact that she was a woman — an argument ignored so far right from the trial court to the apex court. But 43-year-old Kanimozhi, who was arrested on May 20, will have to spend one more night at Tihar, as the release formalities could not be completed on Monday.
Earlier, during the investigation into the 2G scam case, the CBI alleged that Kanimozhi was the brain behind DMK-owned Kalaignar TV's move to take a R200-crore bribe from Shahid Balwa's DB Realty companies in exchange for allocation of licence to Balwa-owned Swan Telecom.

The main 2G scam accused and former telecom minister A Raja, however, is still in Tihar, as he has not applied for bail. He was arrested on February 2, 2011.
The four others who have got bail on Monday are Kalaignar TV managing director Sharad Kumar, filmmaker Karim Morani and Kusegaon Fruits and vegetables Pvt Ltd directors Rajiv Aggarwal and Asif Balwa.
The court, however, reserved its order on telecom secretary Siddhartha Behura's bail plea, as the CBI opposed the move. Bail pleas of public servants required stricter scrutiny, the agency said.
As the news of Kanimozhi being granted bail broke, Karunanidhi announced a big welcome-home party for her in Chennai. "She spoke to me soon after the court gave her bail and both of us shared the happiness," he told reporters in Chennai.
The court has asked those granted bail to surrender their passports, furnish a bond of Rs 5 lakh each with two sureties of as much amount and remain present during the trial on a daily basis.
Justice Shali gave the CBI the liberty to approach the court in case any of the accused violated bail conditions. Justice Shali took the cue from the November 23 Supreme Court order granting bail to five telecom executives, saying, "Bail is rule and jail is an exception."

HC suspends Sukh Ram's sentence, grants him bail

NEW DELHI: In a relief for former Telecom Minister Sukh Ram, the Delhi High Court today suspended the five-year sentence awarded to him in a graft case and granted him bail.

A bench of justice Suresh Kait suspended the sentence keeping in view his old age and various ailments.

"I suspend the sentence till disposal of case," the court said.

The court released him on bail considering that he is an 86-year-old heart patient and keeping in view the medical report submitted by the Tihar Jail authorities, which said he suffered from heart diseases and cervical spondylitis.

It directed Sukh Ram to furnish two sureties of Rs 10 lakh and asked him not to leave the country without the prior permission of the court.

The CBI had opposed his bail, saying he had been convicted twice earlier and was a habitual offender.

Sukh Ram, who had held the Telecom portfolio in P.V. Narasimha Rao's Cabinet, was convicted on November 17 in a cable contract case. He was handed out a five-year jail term by Special CBI judge R. P. Pandey on November 19 and was sent to jail.

He was convicted for misusing his official position during his tenure as Telecom Minister in award of a contract worth Rs 30 crore to Haryana Telecom Limited (HTL), a private firm, to supply 3.5 lakh conductor km of PIJF cables to the telecom department after taking Rs 3 lakh as bribe.

Sukh Ram had earlier been convicted in two separate corruption cases in 2002 and 2009 but remained out of jail after suspension of his sentence. 

Visa fraud: 6 persons arrested

Chandigarh, November 26

The Chandigarh Police today arrested six persons for submitting fake documents with the visa office while applying for tourist visa to the UK.

A special investigation team set up on immigration, student and tourist visa fraud, headed by DSP Anil Joshi, arrested Vikram Sharma, alias Vicky, and Viney Chadha, operators of the Atlantic Overseas Consultancy at Sector 32 here, on November 18.

The police today arrested Amandeep Singh of Yamunanagar, Sukhdev Singh of Karnal, Manjit Singh of Khalsa Basna village in Kurukshetra district, Kashmir Singh of Paherkalan village in Patiala district, Amrik Singh of Patiala and Kulwinder Singh of Jalandhar.

The police said these six applicants had gone to the visa office of the UK in Chandigarh and submitted documents with addresses, bank statements, income tax returns and mobile numbers, which were fake, intentionally in connivance with the main accused for getting tourist visa to the UK illegally.

Joshi said the Chandigarh Police was taking action not only against immigration companies, but also against applicants who were intentionally instigating these companies to prepare fake documents.

Mixed response to HC stay order

Conversion of council into a corporation

Mohali, November 26
There is a mixed response from former municipal councillors to the stay orders of the Punjab and Haryana High Court issued in connection with the government notifications converting the Mohali municipal council into a corporation.
While some of the former councillors have welcomed the orders
saying that the upgraded body had not played any major role in the development of the town, others said they were neither happy nor sad regarding the orders as these were only a part of the legal process and the final verdict was still awaited.
The Punjab and Haryana High Court yesterday stayed the notifications through which the local civic body was upgraded to the level of a corporation. The court had also issued a notice of motion to the department of local government, Mohali Deputy Commissioner and municipal corporation for January 9.
Rajinder Sharma, who owes allegiance to SAD, said he was happy with the orders of the court as the upgraded civic body had done nothing for the development of Mohali. He said NK Sharma, chairman of the district planning committee, had got several development works initiated in the town at his own level, but officials of the corporation had failed to show any results.
Parkash Wati said she was happy to learn about the orders of the court.
She said elected representatives had sacrificed eight months of their term hoping that Mohali would witness major development activities, but only faced disappointment. Moreover, former councillors were promised that they would be nominated to the upgraded civic body, but nothing happened, she added.
Another former municipal councillor Amteshwar Kaur said orders of the high court made no difference to her as she was only interested in the development and was not bothered whether this was carried out by the corporation or the council.

Sukhminder Singh Barnala, however, claimed that the corporation had carried out development works in the town and the government had spent a lot of money in this regard. Had the Congress-headed civic body not been dissolved, the government would have not spent so much here.