Stay Calm and Remain Seated: AMR Tackles Bankruptcy Head on

According to the federal bankruptcy court in Manhattan, when AMR filed for Chapter 11, they had a reported $24.7 billion in assets and $29.6 billion in debt. This doesn’t exactly come as a shock as competition between airlines for the lowest fares is making it harder and harder for them to stay in the air.

 

 

In fact AMR’s main competitors Delta Air Lines and United Airlines have both filed for bankruptcy in the past, but were quick to respond by shedding billions of dollars in costs while negotiating contracts.

 

On the surface it may seem that this type of corporate trauma would be detrimental to AMR’s image, but as Delta and United have proven, there is a way to save the future of the company. With the use of effective crisis communications it is easier to help repair the image of a company in order to continue to gain consumer support.

 

Although this problem seems to be fixable, it leaves consumers and investors with one question — “What now?”

 

American Airlines is working hard to answer just that. With a simple, yet effective communications plan in place they are treating the bankruptcy as more of a ‘restructuring’ process that will provide an opportunity to make the carrier more profitable.

 

Their spin on the idea of what bankruptcy can do for their company sets a good example on how a corporate crisis boils down to the way a company chooses to respond to the problem.

 

AMR decided to tackle the crisis head on and focus on maintaining the communication between its company and customers. Their approach is based on keeping the public up-to-date in an attempt to secure consumer loyalty.

 

They have issued several press releases in order to ensure consumers that the stability of their company is not at risk and that all of their regular services are still available. Providing consumers with easily accessible information shows that they have no secrets to hide, and that they remain committed to maintaining regular business operations.

 

They have also utilized online sources to provide reassurance for their clients. Their company website remains up and running with an added link to information about their reorganization including: video messages, an FAQ section and statements showcasing their dedication to consumers. The online services eliminate the amount of consumers struggling to receive an answer or reach a customer service representative on the phone.

 

AMR has enacted social media practices as well. They have displayed their dedication to consumers by replying to their questions, concerns and comments via Twitter and Facebook. Their Facebook page not only contains links to helpful information, but also shows a video message from CEO and President, Tom Horton, addressing the issue.

 

There is no such thing as a quick fix in this situation, but there’s no doubt that smart communications will definitely stem the bleeding. Maintaining honest and open dialogue with the public will strengthen the trust of consumers and ultimately help to continue customer loyalty. But when it’s all said and done, will you still fly American, and more importantly, what about those frequent flier miles?