AMR reorganization confirmation hearing set for Aug. 15

Posted Friday, Jun. 07, 2013  comments  Print Reprints
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U.S. Bankruptcy Judge Sean Lane has set an Aug. 15 date for AMR Corp.’s confirmation hearing.

If enough creditors vote in favor of the airline’s reorganization plan prior to the hearing, Lane could decide to okay AMR’s reorganization plan, clearing the runway for its exit from bankruptcy and a merger with US Airways.

American Airlines’ parent company is now allowed to begin soliciting votes for its reorganization plan, which includes the merger with US Airways. The Fort Worth-based carrier will send out voting packages by June 20.

The voting deadline is July 29, according to the court order filed on Friday.

“This is a significant step forward in our efforts to complete the most successful restructuring in aviation history,” said AMR chief executive Tom Horton. “The proposed merger is expected to maximize recoveries for all of the company’s economic stakeholders.”

The judge approved AMR’s disclosure statement – its description of its reorganization plan – at a court hearing on Tuesday. At that hearing, however, he did not rule on Horton’s executive compensation package of $20 million, postponing that decision for the Aug. 15 hearing.

US Airways CEO Doug Parker, who will be chief executive of the newly merged carrier, has not yet announced the new executive team for American-US Airways, although an announcement could come early next week.

The merger is still being reviewed by antitrust regulators at the Department of Justice. Based on current figures, American would become the biggest airline in the world, surpassing United Airlines in passenger miles.

Separately, AMR said Friday that its consolidated passenger traffic rose slightly, up 0.8 percent for May as it kept capacity relatively flat. Its consolidated load factor – the percentage of seats filled with passengers – was a record 84 percent, up 0.4 percentage points compared to May 2012.

AMR said its unit revenues dropped 1.8 percent compared to the same month last year. International passenger traffic grew 5.2 percent as it increased capacity by 4.5 percent. The load factor on international flights was 82.6 percent, up 0.6 percentage points.

Domestic traffic dropped 2.1 percent as capacity was cut 2.9 percent. The domestic load factor of 86.1 percent was 0.7 percentage points higher than May 2012.

Andrea Ahles, 817-390-7631 Twitter: @Sky_Talk

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