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American Airlines Files for Bankruptcy Protection

American Airlines planes sit at a gate at Washington's Ronald Reagan National Airport. American Airlines and its parent company are filing for bankruptcy protection as they try to cut costs and unload massive debt built up by years of high fuel prices and

American Airlines' parent company, AMR Corporation, has filed for bankruptcy after failing to secure a deal with pilots to cut labor costs.

The nation's third largest airline said Tuesday it sought bankruptcy court protection to reduce its costs and debt to competitive levels. The airline said normal flight operations will continue during a reorganization.

American had been the only major U.S. airline that had not filed for bankruptcy protection. Its main competitors, Delta and United, used bankruptcy to scrap costly labor contracts and reduce debts. And both have also merged with other companies - Delta buying Northwest and United buying Continental.

In addition to higher labor costs than its rivals, American Airlines has also struggled with soaring jet fuel prices.

In its Chapter 11 bankruptcy filing in a New York court, the company listed $24.7 billion in assets and $29.6 billion in debt.

The Texas-based AMR Corporation also announced the retirement of its chairman and CEO Gerard Arpey and named company president Thomas Horton as his replacement.