US Airways Backs AMR Bid for More Bankruptcy Filing Time

US Airways Group Inc. (LCC), which seeks a merger with AMR Corp.’s American Airlines, backs the carrier’s request for more time to develop a bankruptcy restructuring plan.

American has asked U.S. Bankruptcy Judge Sean Lane in Manhattan to extend to the end of the year its exclusive right to file a plan as it considers mergers. US Airways told Lane yesterday that the request should be granted, citing AMR’s intention to consider strategic alternatives.

“The need for such an assessment, and the commitment to conduct it, provide cause for the extension,” the airline said in a court filing.

AMR Chief Executive Officer Tom Horton told employees in a letter July 10 that it makes sense for American to consider mergers and that the airline had discussed with the committee representing unsecured creditors “multiple options” available to the company.

AMR, based in Fort Worth, Texas, and the creditors committee want the exclusive right to file a bankruptcy plan extended to Dec. 28 from Sept. 28. Lane is scheduled to consider the request at a July 19 hearing. An extension would prevent others from proposing rival plans.

American and the creditors committee said in court papers they intend to complete “a fair, balanced and transparent strategic alternatives assessment.”

AMR Creditor

US Airways said it is a creditor of AMR. The Tempe, Arizona-based airline owns $1 million of debt for which it paid about $600,000, spokesman John McDonald said in an e-mail. The airline bought the debt to ensure it has standing to participate in American’s bankruptcy case, he said.

US Airways shares rose 3.4 percent to $14.44 at 12:37 p.m. in New York Stock Exchange composite trading.

“We think this will be particularly important now that AMR has publicly committed itself to a review of strategic alternatives,” McDonald said.

Bruce Hicks, an AMR spokesman, said in a statement that the US Airways court filing supporting the exclusivity extension is “a meaningless ploy to garner publicity.”

“US Airways admits they own a very small amount of debt which gives them no special position with the court or in this process,” Hicks said. “Our focus remains on creating the strongest company and greatest value for our stakeholders.”

The case is In re AMR Corp. (AAMRQ), 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David McLaughlin in New York at

To contact the editor responsible for this story: John Pickering at

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