Thursday, July 19, 2012

CEOs of American, US Airways talk merger options

By NBC News staff and wire reports

?AMR Corp. CEO Thomas Horton and US Airways' Doug Parker met Thursday over a breakfast of oatmeal in Washington to chat about a possible merger between the two airlines.

The Wall Street Journal, citing people familiar with the meeting, said the chinwag took place in the early morning hours at a downtown Washington hotel. The paper said Horton told Parker that AMR, the parent of American Airlines,?would not be rushing into any big moves while it moves methodically through the bankruptcy reorganization that it has been in since November.

Parker has conducted a very public campaign to merge with AMR. US Airways confirmed that the meeting took place, The Associated Press reported.

The Wall Street Journal reported that Horton said AMR would examine all of its options, including remaining independent, a deal with another airline or some sort of situation involding mutliple airlines.

AMR Corp won court approval on Thursday to extend through December 28 its exclusive right to present a plan to emerge from bankruptcy.

Judge Sean Lane granted the request, which was supported by AMR Corp's creditors' committee, at a hearing in U.S. Bankruptcy Court in Manhattan. The current exclusivity period was to have run out in September.

AMR went bankrupt in November, citing an untenable labor cost structure.

The extension blocks creditors from pushing their own proposals on how AMR should restructure its debt.

Extending the exclusivity period does not necessarily kill the prospect of a merger in bankruptcy. At the behest of its creditors, AMR is considering merger partners as part of its restructuring, and the sides could still negotiate a consensual merger deal during bankruptcy.

US Airways is considered as the leading contender for a merger by many industry analysts, but sources have told Reuters that AMR is also speaking to other carriers and investors about a potential tie-up.

US Airways recently acquired a piece of AMR debt, making it a creditor and allowing it to be heard at the bankruptcy hearings. In court papers earlier this month, US Airways said it supported the extension of AMR's exclusivity period.

A lawyer for US Airways tried to address the court at Thursday's hearing, but Judge Lane said he did not want to be distracted by merger talk.

"I know (you are) a creditor, but there are a lot of creditors in the case," Lane said. "I don't want to get sidetracked on that particular issue this morning."

The Associated Press and Reuters contributed to this report.

U.S. Airways CEO Doug Parker explains why he is pressuring American Airlines for a merger. "What's really important here is the 100,000 people that work for both companies, and making sure they're working for as secure an airline as they possibly can,"...

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Source: http://marketday.msnbc.msn.com/_news/2012/07/19/12834369-ceos-of-american-us-airways-talk-merger-options?lite

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