American Airlines' parent company, AMR Corp., filed for Chapter 11 bankruptcy on Tuesday morning and its chief executive, Gerard Arpey, has retired.

The Fort Worth-based carrier said it will continue to operate a normal flight schedule for American Airlines and its regional subsidiary, America Eagle, while it is reorganizing in bankruptcy.

The airline named its current president, Tom Horton, as the company's new chief executive.

"Our very substantial cost disadvantage compared to our larger competitors, all of which restructured their costs and debt through Chapter 11, has become increasingly untenable given the accelerating impact of global economic uncertainty and resulting revenue instability, volatile and rising fuel prices, and intensifying competitive challenges," Horton said in a statement. "Our Board decided that it was necessary to take this step now to restore the Company's profitability, operating flexibility, and financial strength."

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