AMR, Creditors To Meet For Update

 

AMR, Creditors To Meet For Update

AMR, Creditors To Meet For Update

AMR chief executive Tom Horton is to meet creditors on Tuesday and provide an update on talks after pilots rejected a contract offer from the bankrupt parent of American Airlines last week, according to people familiar with the matter.

Horton and other senior executives are also expected to discuss American’s financial and operational performance, negotiations with its trade vendors and its ongoing review of potential mergers at a scheduled monthly meeting with the airline’s unsecured creditors committee Tuesday, one of the people said.

American management led by Horton has met creditors monthly to brief the group on different elements of bankruptcy restructuring. Uncertainty created by the pilots’ rejection of a new contract offer is likely to be one of the major topics this month.

The people asked not to be named because the matter is not public. American declined to comment, as did a lawyer for its creditors’ committee.

The meeting in New York comes a day before Judge Sean Lane, who is overseeing American’s bankruptcy, is scheduled to rule on whether the carrier can abandon its current contract and unilaterally impose temporary work terms while the two sides continue to negotiate a long-term agreement.

Last week, the Allied Pilots Association, the airline’s most powerful employee group, voted 61 percent to 39 percent to reject American’s latest contract offer, which would have imposed about USD$315 million in cost cuts.

Failure to reach a consensual deal could be a blow to American’s efforts to develop a standalone plan, which relies on cutting debt and labour costs to return to profitability.

(Reuters)



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