American Airlines seeks more time to file restructuring plan
FORT WORTH, Dec 01, 2012 (Menafn - Fort Worth Star-Telegram - McClatchy-Tribune Information Services via COMTEX) --Superstorm Sandy led to 40 million in lost revenue for AMR Corp. in October while operational problems cost it an additional 45 million.
The setbacks contributed to a net loss of 164 million in October for the parent of Fort Worth-based American Airlines, according to government filings made Friday afternoon.
Earlier in the day, American asked the U.S. Bankruptcy Court for more time to file a restructuring plan as it awaits the results of a contract vote by its pilots union. The request was made jointly with the unsecured creditors committee and would give American until March 11 to file a reorganization plan before outside parties can do so.
As it stands, American's exclusivity period ends Jan. 28. The extension would be the fourth for American since it filed for bankruptcy a year ago this week.
Sandy, which hit the East Coast in late October, caused American Airlines and its regional carrier, American Eagle, to cancel more than 2,000 flights, AMR said in a filing with the Securities and Exchange Commission.
And during the first two weeks of the month, American had substantial delays and flight cancellations, partly because of an increase in last-minute maintenance reports filed by pilots after the rejection of a contract proposal. The Allied Pilots Association said it did not engage in a work slowdown.
Excluding 72 million in reorganization fees, AMR said, it would have posted a monthly loss of 92 million, according to a court filing required as part of bankruptcy.
The company said it spent 22 million on aircraft financing renegotiations and rejections and 23 million on professional fees during the month. It also spent 27 million on "other" reorganization items not detailed in the report.
Total revenue for the month was 1.95 billion. The company ended October with 494 million in cash and 3.7 billion in short-term investments, for a total of about 4.2 billion on hand.
That's about the same amount reported in September and does not include 848 million in restricted cash.
The filing extension would give American time to resolve its labor issues and review "all strategic alternatives" with creditors, American said in its filing with the court. A hearing has been tentatively scheduled for Dec. 19.
American's pilots are voting on whether to ratify the carrier's latest offer, which includes pay raises and an equity stake in return for expanded ability to use code sharing and regional jets.
The Allied Pilots Association is the only labor group at American that has not approved a new contract.
American spokesman Sean Collins said the carrier has made significant progress in its restructuring.
"This work, while progressing well, takes time, and American and the unsecured creditors committee believe that the proposed extension to March 11, 2013, is appropriate for this process to continue in an orderly and efficient manner," Collins said.
Andrea Ahles, 817-390-7631
Twitter: @Sky_Talk
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