This morning American Airlines filed for Chapter 11 bankruptcy protection, but this isn’t as big a deal as it sounds — at least not from the travelers’ perspective.

American has been losing quite a bit of money lately and is trying to use the bankruptcy process to reduce its costs — which are significantly higher than its competitors.  Its rivals United, Continental, Delta, and US Airways have all been through Chapter 11 at least once.

American promises flight operations will not be impacted at all and, based on the history of other airlines who have been through this, that is a very reasonable claim.  The bankruptcy process is likely to drag on for many months, if not years and we do not believe it’s necessary to avoid booking American at any time in the foreseeable future.

The worst case scenario is that, ultimately, the reorganization fails and American stops flying.  If that were to happen, it would likely take one or more years and, in that scenario, customers who pay by credit card would still have a built-in insurance that they would be able to obtain a full refund from their card issuer.

Here is a link to an information page on the American website that provides some more details.