Thank you for sharing!

Your article was successfully shared with the contacts you provided.
American Airlines’ parent AMR Corp. reached agreements with its unions late Monday for $1.8 billion in annual concessions, at least temporarily averting a bankruptcy filing. The Fort Worth, Texas-based company, which burned through more than $5 billion over the last two years, has said it needs the concessions as part of a plan to trim annual expenses by $4 billion. AMR has consulted with attorneys with Weil, Gotshal & Manges about a possible bankruptcy for months, but has said it hopes to restructure outside of the courts. “By taking these decisive actions, the union leadership and our employees have demonstrated an unwavering commitment to the future of the company, and have enabled us to avoid an immediate filing with the bankruptcy court,” AMR Chairman Don Carty said in a statement. “The speed with which these comprehensive and complex agreements was reached is a testament to our people.” The agreements call for pilots to give up $660 million in salary and benefits, the most of any group. Mechanics and other ground workers will surrender $620 million, flight attendants $340 million, and agents will give up $80 million. Management and support staff at the airline had already agreed to surrender $100 million in salary and benefits. But the company is not completely out of the woods yet. The agreements must still be ratified by the unions’ memberships, and AMR warned it still must secure “meaningful concessions” from its vendors, lessors and suppliers. Even if those concessions are received, sources warn AMR could be forced into bankruptcy protection should traffic not improve. The company has secured commitments for up to $1.5 billion in debtor-in-possession financing from Citigroup, JP Morgan Chase & Co., Merrill Lynch & Co. Inc. and CIT Group just in case a filing is necessary. A source close to management said that if AMR were forced to file, the company would attempt to follow in the footsteps of US Airways Group Inc., which reached deals with its unions shortly before filing to reorganize last August. Arlington, Va.-based US Air emerged from bankruptcy Monday after only seven months. Industry analysts say the company’s quick reorganization would not have been possible if not for its pre-existing deals with labor. Copyright �2003 TDD, LLC. All rights reserved.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.