(MENAFN - AFP) A US bankruptcy court gave its green light to AMR Corporation, parent company of bankrupt airline American Airlines, to purchase new airplanes from Airbus and Boeing.
The order will allow American Airlines to complete transactions it had announced in 2011 with Airbus and Boeing prior to its November 2011 filing for bankruptcy protection.
The order comes amid a broad overhaul of the giant US carrier that has seen it reduce debt, renegotiate aircraft leases and slash labor costs by some 17 percent.
Approving the transactions is "in the best interests of the Debtors, their estates, creditors and all parties in interest,"Judge Sean Lane wrote.
American Airlines had announced an order of 200 Boeing 737 planes and 260 Airbus A320s.
"We are pleased to achieve this significant milestone in our restructuring related to our fleet plan," an AMR spokeswoman said in a statement.
"By receiving these approvals from the Court, we expect to continue to build the most modern, fuel-efficient fleet among US network carriers in less than five years."
American plans to take delivery of nearly 60 new planes this year, the American spokeswoman said.
"This is a very positive development and we stand ready to provide American Airlines with the most reliable and efficient single-aisle fleet," said a spokesman for Airbus in an email.
A Boeing spokesman said the company is "pleased" to finalize its contracts for a series of Boeing aircraft.
"Assuming the purchase agreements with Boeing will provide American with modern, fuel-efficient airplanes with the lowest operating costs in the industry, while offering an unsurpassed passenger experience," the Boeing statement said.
Earlier this month, American reported an annual loss of 1.9 billion in 2012. But excluding reorganization and special items, the full-year net loss was 130 million.
American has emphasized its progress in moving toward completing its bankruptcy reorganization, noting that fourth-quarter profits were a big jump over last year's level.
The company has recently requested an extension until March 11 for presenting its final restructuring plan.