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An exchange traded fund that invests in airline stocks was in focus Tuesday after American Airlines parent AMR Corp. (AMR) filed for bankruptcy.

Guggenheim Airline ETF (FAA) was up fractionally in afternoon trading Tuesday. The fund is very small, holding less than $20 million in assets. It is down about 37% year to date.

“AMR’s Board of Directors determined that a Chapter 11 reorganization is in the best interest of the Company and its stakeholders. Just as with the Company’s major airline competitors in recent years, the Chapter 11 process enables American Airlines and American Eagle to continue conducting normal business operations while they restructure their debt, costs and other obligations,” the company said in a statement.

AMR said its chief executive, Gerard Arpey, is retiring and that Thomas Horton has been named chairman and CEO.

“This was a difficult decision, but it is the necessary and right path for us to take – and take now – to become a more efficient, financially stronger, and competitive airline,” Horton said of the bankruptcy filing.

AMR accounts for 2.6% of the airline ETF’s portfolio. AMR shares have lost about three-quarters of their value in 2011, the Financial Times reported. “The move brings to end a nearly decade-long effort to avoid Chapter 11. In 2003, American chose to avoid bankruptcy, while its rivals used the process to shed their pension plans and reduce structural costs, leaving it at a substantial disadvantage,” FT reported.

AMR shares took a big hit last month on speculation the American Airlines parent would file for bankruptcy.

An airline ETF managed by Direxion recently shut down due to lack of interest.

AMR shares were down 80% on Tuesday from the previous close of $1.62.

Guggenheim Airline ETF

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Disclosure: None

Source: Guggenheim Airline ETF In Focus On AMR Bankruptcy Filing