American merger decision expected by year end

New York
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American Airlines parent AMR will make a decision on whether to pursue a merger or continue to seek a standalone restructuring by the end of the year, says the carrier's unsecured creditors committee.

"Strategic alternatives identified and explored by the debtors in collaboration with the committee must be compared against the standalone plan," it says in a court filing today. "The committee expects that this process will be completed during the current calendar year."

The Fort Worth-based Oneworld carrier has signed confirmed non-disclosure agreements with British Airways-parent International Airlines Group (IGA) and US Airways to explore acquisition and merger options, while it continues to develop a standalone business plan.

American has until 28 December to file a reorganisation plan with the bankruptcy court in New York before other parties can file competing proposals.

The airline received approval to reject its pilots contract from the court on 5 September. It can now implement its proposed term sheet, which includes relaxed regional jet scope restrictions and allows for increased domestic codeshares, on its pilots, however, significant pressure remains for it to reach a consensual agreement with the Allied Pilots Association from the creditors committee and others.

American has reached consensual agreements with its flight attendants and other unionised employee groups that are expected to be approved by the court shortly.