American Airlines agrees to study merger idea
- Published on 05/11/2012 - 3:55 pm
(AP) — American Airlines says it is agreeing with creditors to consider potential mergers while it is still under bankruptcy protection.
American parent AMR Corp. says that the company and its bankruptcy creditors agreed to develop "potential consolidation scenarios," but that didn't mean it would pursue a deal with any particular party.
Still, Friday's announcement suggested that events could be moving faster than AMR had expected since US Airways turned up the pressure for merger talks.
AMR CEO Thomas Horton has said for months that he wanted American to emerge from bankruptcy protection as an independent airline. A bankruptcy judge granted AMR the exclusive right through late September to present a reorganization plan to the court. Politicians including Texas' senior U.S. senator appealed for everyone else to leave AMR alone.
None of that deterred US Airways, a smaller competitor — but a profitable one. US Airways has lobbied AMR's creditors and lined up support from American's three unions for a takeover.
On Friday hundreds of pilots and other employees marched into AMR headquarters in Fort Worth, Texas, and in New York to deliver a message of "no confidence" in the company's management. The unions believe that a combined company would cut fewer jobs and stand a better chance at competing with industry leaders United and Delta.
Beverly K. Goulet, AMR's chief restructuring officer, said Friday's agreement to work with the bankruptcy creditors committee on potential merger scenarios represented no change in AMR's belief that its fate will be decided by company management, directors and creditors. She said the agreement "does not in any way suggest that a transaction of any kind or with any particular party will be pursued."
Others interpreted it differently. Jamie Horwitz, a spokesman for the Transport Workers Union, which represents mechanics and bag handlers at American, said he was pleased American would at least consider a merger while still in bankruptcy.
"We've run (newspaper) ads and done everything we could to tell the company to consider every option, and one is the possible sale or merger," he said. "It should be explored now rather than later."
Standard & Poor's, citing a Bloomberg News report that AMR would consider a merger as an alternative to its stand-alone restructuring plan, said the move made it more likely that US Airways will acquire AMR or merge with it. S&P kept a "Buy" rating on US Airways stock.