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AMR Corp submits reorganisation plan to US Court, merger hearing date set for 15-Aug-2013

17-Apr-2013 12:50 PM

American Airlines parent company, AMR Corporation, submittedv (16-Apr-2013) its reorganisation plan to the US Bankruptcy Court for the Southern District of New York on 16-Apr-2013, ahead of its proposed merger with US Airways. In its submission, AMR Corp requested it be allowed to exit bankruptcy ahead of a proposed merger closing date of 31-Aug-2013, following a series of reviews and hearings. The merger now requires approval from AMR Corp’s creditors, US Airways shareholders, US and international regulators and the US Bankruptcy Court. US Bankruptcy Court Judge Sean Lane will consider the plan at a hearing scheduled for 15-Aug-2013. The submitted plan includes a USD19.88 million severance package for American Airlines CEO Tom Horton, a payment Judge Lane rejected on 11-Apr-2013. As previously reported by CAPA, AMR Corp shareholders will obtain 72% of the merged carrier’s stock, leaving US Airways shareholders the remaining 28%. The plan includes the following financial and network estimates for the combined carrier:

  • Net income: USD4.4 billion in 2015 including merger cost savings, decreasing to USD2.6 billion for 2017;
  • Total revenue: USD47.83 billion for 2017;
  • Integration costs: USD1.2 billion over three years;
  • Cash on hand: USD10.5 billion in 2017;
  • Fuel costs: USD13.1 billion in 2017 (at USD2.80 per gallon);
  • Labour costs: USD9.6 billion in 2017;
  • Debt maturity obligations: USD12-14billion p/a;
  • Long term debt and capital lease obligations, minus current maturities: USD7.2 billion in 2017;
  • Capacity growth: 2.9% p/a;
  • PRASM growth: 1.4% p/a.