NEW YORK—Rumors that American Airlines parent AMR Corp would file for bankruptcy protection sent the company’s stocks plummeting Monday.
At 1745 GMT, the stock was down 34.1 percent to $1.95, as the airline, continued to struggle with a high debt load and sluggish demand growth, according to analysts.
Morningstar analyst Basili Alukos said the selling comes after an “abnormal” number of pilot retirements in the past two months, with the pilots seeking to sell off their own stocks in the company out of fears it would fail.
“There is a lot of speculation that they were trying to sell their shares as fast as they could before the company faces more financial problems and file for bankruptcy,” Alukos said.
Some 200 pilots have departed in recent months, compared to the normal average of 12 per month, he said.
AMR stock was down 76 percent from the beginning of the year.
The bankruptcy talk “is not a new speculation,” Alukos added, saying that American Airlines has a disadvantage to its competitors on fuel and labor costs that management has not been able to overcome.
AMR reported a loss of $286 million for the second quarter.
Even so, the airline announced in July the largest-ever single order for aircraft, 200 Boeing 737s and 260 Airbus A320 jets, both more fuel efficient than the aircraft it currently operates.
Currently American and sister American Eagle have a fleet of 900 aircraft.