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Robert Crandall left in 1998 and was replaced by Donald J. Carty, who negotiated the purchase of the near bankrupt Trans World Airlines (it would file for its third bankruptcy as part of the purchase agreement) and its hub in St. Louis in April 2001.

American Airlines began losing money in the economic downturn that followed the September 11, 2001 attacks, in which two of its planes were destroyed. Carty negotiated wage and benefit agreements with the unions but resigned after union leaders discovered he was planning to award executive compensation packages at the same time. This undermined AA's attempts to increase trust with its workforce and to increase its productivity. The St. Louis hub was downsized, AA rolled back its "More Room Throughout Coach" program (which eliminated several rows of seats on certain aircraft), ended three-class service on many international flights, and standardized its fleet at each hub. However, the airline also expanded into new markets, including Ireland, India, and mainland China. On July 20, 2005, American announced a quarterly profit for the first time in 17 quarters; the airline earned $58 million in the second quarter of 2005.

AA was a strong backer of the Wright Amendment, which regulated commercial airline operations at Love Field in Dallas. On June 15, 2006, American agreed with Southwest Airlines and the cities of Dallas and Fort Worth to seek repeal of the Wright Amendment on condition that Love Field remained a domestic airport and its gate capacity be limited.

The 2008 financial crisis again placed strain on the airline. On July 2, 2008, American announced furloughs of up to 950 flight attendants, via Texas' Worker Adjustment and Retraining Notification Act system, in addition to the furlough of 20 MD-80 aircraft. American's hub at Luiz Muñoz Marin International Airport in San Juan, Puerto Rico was truncated from 38 to 18 daily inbound flights. All Airbus A300 jets were retired by the end of August 2009 and are stored in Roswell, New Mexico.


American also closed its Kansas City overhaul base, inherited from TWA. On August 13, 2008, The Kansas City Star reported that American would move some overhaul work from the base, with repairs on Boeing 757s moved to Tulsa, Oklahoma along with one or two Boeing 767 repair lines; the city's aviation department offered to upgrade repair facilities on condition that the airline maintain at least 700 jobs. On October 28, 2009, American notified its employees that it would close the Kansas City base in September 2010, and would also close or make cutbacks at five smaller maintenance stations, resulting in the loss of up to 700 jobs. American closed its maintenance base at Kansas City (MCI) on September 24, 2010.


American had repeated run-ins with the FAA regarding maintenance of its MD-80 fleet, canceling 1,000 flights to inspect wire bundles over three days in April 2008 to make sure they complied with government safety regulations.[40] In September 2009, the Associated Press and The Wall Street Journal reported that American was accused of hiding repeated maintenance lapses on at least 16 MD-80s from the FAA. Repair issues included such items as faulty emergency slides, improper engine coatings, incorrectly drilled holes, and other examples of shoddy workmanship. The most serious alleged lapse is a failure to repair cracks to pressure bulkheads; the rupture of a bulkhead could lead to cabin depressurization. It is also alleged that the airline retired one airplane in order to hide it from FAA inspectors. American began the process of replacing its older MD-80 jets with Boeing 737s and Airbus A319s and A321s.

American was a key player in the 2009-2011 restructuring of Japan Airlines. In September 2009, AMR Corporation announced that it was looking into buying part of the financially struggling JAL, while rival Delta Air Lines was also looking into investing in the troubled airline along with its SkyTeam partner Air France-KLM. Japan Airlines called off negotiations of the possible deal with all airlines on October 5, 2009. Delta, with help from TPG, made a bid of $1 billion in November 2009 for JAL to partner with them; two days later, reports came from Japan that AA and TPG had teamed up and made a $1.5 billion cash offer to JAL. In February 2010, JAL officially announced that it would strengthen its relationship with American Airlines and Oneworld.[46] This led to an enhanced joint venture between American and JAL beginning April 1, 2011.

 

 

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