AMR Chief Thinks Airlines Could Be Takeover Target (AMR)
When AMR Corp. (NYSE: AMR), parent of American Airlines, filed for bankruptcy, the company hoped it would be able to re-negotiate some labor contracts and reduce its expenses — through downsizing both routes and people — and exit bankruptcy proceedings on a firm financial footing. Now, the company’s CEO says that AMR could become an acquisition target.
In a letter to employees cited by Bloomberg, CEO Tom Horton said:
We will restructure our debt and aircraft leases, and as we do we will undoubtedly need to ground some planes and resize our network before we can turn the corner and grow again. And, regrettably, we will most certainly end the process with fewer people than we have today.
[Some parties to AMR’s bankruptcy may want] to shrink dramatically, close hubs and lay off thousands more to create the greatest value for creditors [by breaking up the company].
And as we’ve seen before in this situation, there may be opportunists who wish to acquire our company while we are in this situation.
Horton did not name potential acquirers.