Shares of the Fort Worth-based carrier surged 30 percent to $1.18 a share in morning trading after its lead counsel indicated Tuesday that shareholders may be able to recover some value for their equity if the carrier emerges on its own.
In a letter dated Jan. 3, attorney Harvey Miller, the lead counsel for AMR Corp., told a Justice Department attorney that the value of the carrier has “significantly appreciated” due to the “remarkable progress” it has made in its restructuring.
“Depending upon the ultimate strategic alternative adopted and pursued, there exists a reasonable possibility that there may be value for AMR equity holders consistent with the absolute priority rule,” attorney Harvey Miller wrote.
Officials from the two carriers have been meeting in recent weeks to discuss the possibility of merging. AMR’s board of directors is expected to discuss the situation at a meeting today, but no decision is expected.
The letter was in response to a shareholder request to create an equity committee as part of the bankruptcy process. Often during bankruptcy, shareholders receive little to no money for the value of their shares.
Since mid-November, shares of AMR [ticker: AAMRQ] trading on the over-the-counter markets have more than doubled in value, closing at 90 cents Tuesday.
AMR, US Airways, the airlines’ unions and the unsecured creditors committee have been involved in the merger talks. And in the past two weeks, American’s flight attendants union and the pilots unions at both carriers have agreed to a memorandum of understanding that outlines seniority integration and work rules for flight crews in the event of a merger.
In a memo sent to pilots Tuesday, the Allied Pilots Association explained that it is unable to share details of the memorandum until a nondisclosure agreement, which is in effect until the end of the month, expires. “We are not certain on timing at this point, but rest assured you will have plenty of time to review the complete MOU well in advance of any merger between US Airways and American,” the union said. “We are working with the companies and the UCC on exact timing and will continue to push for release from the NDA at the earliest opportunity so we can provide you with the MOU.”
The APA said the memorandum only adds to the contract agreement the pilots approved in December and will not be an entirely new collective bargaining agreement.
Earlier Tuesday, Virgin Atlantic said it had hired American Airlines Senior Vice President Craig Kreeger as its new chief executive.
Kreeger, 53, who has worked for American for more than 25 years, will start at Virgin in February, overseeing the British carrier’s new relationship with Delta Air Lines. Delta purchased a 49 percent stake in Virgin Atlantic in December.
In his most recent position at American, Kreeger oversaw customer service from reservations to airport operations to inflight service and baggage handling.
“Craig has always been a driving force at American — bringing innovation and transformation to so many parts of our airline for more than 25 years,” said American Chief Executive Tom Horton.
Jon Snook will replace Kreeger as American’s senior vice president of customer service. Snook, a native of Manchester, England, is currently American’s vice president of operations planning and performance.
Andrea Ahles, 817-390-7631
Twitter: @Sky_Talk ___