By Joseph Checkler
NEW YORK--A judge on Wednesday said American Airlines parent AMR
Corp. (AAMRQ) can buy 11 new airplanes from Boeing Co. (BA) and
then enter into a sale-leaseback transaction for those planes.
Judge Sean H. Lane of the U.S. Bankruptcy Court in Manhattan
approved the deal, which calls for AMR to buy 11 of Boeing's
737-823 planes and sell them to AerCap Holdings N.V. (AER), which
will then lease the planes to AMR.
The prices of the planes and other terms were filed
confidentially with the court. An AMR spokesman didn't immediately
respond to a request for comment on the financial details.
Last December, less than a month after AMR filed for bankruptcy,
Judge Lane approved a set of procedures to streamline the approval
process for such aircraft purchases. But AMR said it needed to
obtain additional financing for planes being delivered for the rest
of this year and 2013, so it shopped for that financing and ended
up with the AerCap deal.
AerCap, the world's third-largest aircraft lessor by fleet
value, last year agreed to buy up to 35 Boeing 737-800s ordered by
AMR before the bankruptcy filing.
A lawyer for AMR said the deal was similar to other transactions
the company made both before and during the bankruptcy to "renew
and modernize" AMR's fleet.
AMR filed for Chapter 11 last November with the intent to slash
both operating costs and liabilities related to its labor unions.
The company's mechanics and flight attendants have both voted to
ratify contracts at better terms for AMR, but Judge Lane last week
denied the company's attempt to reject its labor agreement with
pilots. AMR submitted changes to the judge, who will then rule on
whether the contracts can be terminated. The company and the pilots
could still come to an agreement on a new contract.
While AMR is pursuing a bankruptcy-exit plan that would keep the
company independent, it has recently warmed up to the idea of
merging with a rival. US Airways Group Inc. (LCC) remains the
frontrunner for such a tie-up, but progress between the two has
been slow.
At Wednesday's hearing, the company offered no updates on the
labor issues or merger progress.
Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com)
-Doug Cameron in Chicago contributed to this article.
Write to Joseph Checkler at joseph.checkler@dowjones.com. Follow
him on Twitter at @JoeCheckler
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