THE stock of American Airlines parent company AMR Corp tumbled overnight, at one point falling nearly 40 per cent, on renewed concerns the carrier could be headed for bankruptcy protection.
This comes as ACCC last week approved Qantas Airways' proposed alliance with American Airlines on trans-Pacific routes.
Shares in AMR Corp lost US84 cents (88 cents), or 28 per cent, to trade around $US2.12 in early afternoon trade after plummeting to their lowest point in eight years. The stock has not closed below $US2 since 2003.
A major airline trade group, The International Air Transport Association, said the industry may be headed for a downturn. American Airlines is considered to be in the most vulnerable financial position of major US carriers.
Morningstar analyst Basili Alukos said he believes AMR implemented "its last-ditch effort to return to profitability" when it spun-off its regional carrier and said it would place a record order to buy 460 planes to quickly address its aging fleet.
American Airlines is the only major airline that has not filed for bankruptcy protection in the past decade, leaving it saddled with higher costs for everything from labour to financing. American is the only major airline that has lost money this year.
Fort Worth, Texas-based AMR lost $US286 million ($297 million) in the second quarter alone.