Creditors of AMR Corp. (AAMRQ), the parent company of American Airlines and American Eagle, are seeking an all-stock merger with smaller rival US Airways (LCC: Quote) and do not want part of their claims to be paid in cash, reports said.
AMR and some of its subsidiaries, including American Airlines and American Eagle, had filed for Chapter 11 bankruptcy protection in November 2011.
In late August, AMR and US Airways had entered into a non-disclosure agreement to evaluate a potential merger of American Airlines and US Airways.
As per that agreement, the companies would exchange some confidential information, and US Airways would work in close collaboration with AMR's unsecured creditors committee to evaluate a potential combination.
It was reported at that time that some members of the unsecured creditors committee had given a positive response to US Airways' plan for the combined airline, targeting to complete the combination before AMR exits bankruptcy.
AMR was one of the few airlines that averted bankruptcy after the 9/11 attacks and subsequent downturn. However, the company reported losses in the following years even as peers resolved cost issues and returned to profit.
Latest media reports suggest that the merger talks are at an advanced stage. A decision on whether AMR should combine with US Airways or emerge out of bankruptcy as an independent airline is said to be expected by next month.
LCC settled down 1.4 percent at $12.70 on Wednesday.
| || |
| To receive FREE breaking news email alerts for US Airways Group and others in your portfolio|
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org