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| In 2006, the company filed for reorganization under Chapter 11 of the United States Bankruptcy Code. They are operating as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court. The company filed a Plan of Reorganization in December 2006, which outlines their intention to emerge from Chapter 11 as an independent airline. The plan includes the resolution of pre-petition obligations and addresses the capital structure and corporate governance after exiting Chapter 11. Most holders of allowed unsecured claims will receive common stock of the reorganized company, while some will have the option to request cash proceeds from the sale of stock. Current equity holders will not receive any distributions. The Plan has received support from the official committees of unsecured creditors and retiree committees. Creditors have until April 9, 2007, to vote on the Plan, and a confirmation hearing is scheduled for April 25, 2007. In 2006, the company recorded a net loss of $6.2 billion, primarily due to a charge for reorganization items. However, they reported operating income of $58 million, an improvement from previous years. The company has focused on revenue and network productivity improvements, in-court restructuring initiatives, and labor cost reductions as part of their restructuring business plan. They have achieved $3.0 billion in annual financial improvements by the end of 2006 and expect to achieve additional improvements in 2007. The company has also strengthened their liquidity, with cash and cash equivalents totaling $2.6 billion at the end of 2006. | |
| The company has made significant improvements in revenue and network productivity by simplifying their fleet, right-sizing capacity, and increasing international presence. They have added more flights to various destinations and are continuing to expand their international service. The company has also implemented in-court restructuring initiatives to reduce costs, including rejecting or selling aircraft and restructuring leases. They have achieved labor cost reductions through agreements with the Air Line Pilots Association and implementing plans for non-pilot employment cost reductions. They have also reached agreements with retired pilots and non-pilot employees for savings in retiree healthcare benefits. The company has successfully advocated for pension reform legislation and reached agreements regarding the termination of the Pilot Plan. They have also implemented an enhanced profit-sharing plan for employees. Overall, the company has taken significant steps to improve their financial position and reduce costs, positioning them for future success. |