Once again, the parent company of American Airlines has filed for bankruptcy. Is it even possible for a full fare carrier to remain competitive in an era of no-frills airlines?

Perhaps we’re simply at a point in history where the legacy costs of substantial union contracts for airline pilots, flight attendants, maintenance personnel, counter staff and baggage handlers are simply too high to compete against discount operators. Most discount operators are also savvy in the way they streamline their aircraft purchases and select a minimal number of aircraft models. This greatly reduces the operating costs and associated maintenance fees required to run an airline.

We clearly hope that American is capable of reorganizing in a way that maintains gainful employment for the tens of thousands of American employees who’ve been through this multiple times. At the same time, it’s important that they align their costs to match today’s reality of revenue streams in a discount marketplace. It can’t be easy in these recessionary times.

Whenever an airline files for bankruptcy protection consumers become concerned and begin to book flights with other carriers. I would expect that we will see significant seat sales in the near future as American Airlines attempts to maintain customer loyalty and keep their planes flying full.

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