Details emerge on US Airways-AMR merger offer
BY Staff and Wire Reports
Friday, December 07, 2012
The approval of a new contract Friday by American Airlines’ pilots could speed action on a merger proposal that reportedly is on the table from US Airways, analysts said.
The contract vote filled in the last unknown piece in AMR’s labor-cost puzzle. The company’s creditors “very much wanted a contract because they want some visibility on what the cost structure will be,” Ray Neidl, an airline analyst for Maxim Group PLC, told The Associated Press.
US Airways has formally proposed a merger that would give AMR creditors 70 percent of the combined company, which would be run by US Airways Group Inc. CEO Doug Parker, according to a person familiar with the discussions and who spoke on condition of anonymity because the talks are private.
There have been reports that AMR might seek up to 80 percent for its creditors, which could be unacceptable to US Airways shareholders, the person said.
Last month, a committee of bondholders told the pilots’ union they would only support an independent American if AMR had a new board that would pick managers to run the airline.
The airlines have exchanged confidential financial information and talked about a potential merger for several weeks, although a deal is not certain.
The value of the deal under consideration is about $8.5 billion, a source told the Reuters news service on Friday. The Wall Street Journal also reported details of the story.
A merger agreement could be reached as soon as January, the person said.
AMR’s executives, meanwhile, still are pushing a plan to emerge from bankruptcy as an independent airline.
