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AMR to delay debt, lease payments
But deal between the airline and labor unions help the firm avoid bankruptcy, boosts stock price.
April 1, 2003: 6:07 PM EST

New York (CNN/Money) - The stock of American Airlines' parent company jumped about 43 percent Tuesday after Monday's announcement that the world's biggest airline has averted bankruptcy, at least for now.

The nation's largest airline, however, said it will delay payments on some debt and aircraft lease obligations and it will invoke "grace periods" in an unspecified number of financing agreements while it continues talks to negotiate restructuring agreements. Failure to make a payment within a grace period ordinarily results in default.

Donald Carty, chairman and CEO of AMR Corp., which owns American, said tentative deals with the pilots, flight attendants and transport workers reached Monday will help save $1.8 billion and keep the struggling airline out of bankruptcy court. The last tentative labor agreement, with the all-important pilots unions, came late Monday evening.

But Carty warned in a statement that "the financial condition of American is weak and its prospects remain uncertain," adding that the Iraq war and the sluggish economy mean that "the days ahead will be difficult."

Separately, AMR notified the Securities and Exchange Commission it will delay filing an annual financial statement, citing ongoing talks to reduce costs.

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Analysts said American might at some later date still need to seek protection from creditors, especially if the war is prolonged. AMR (AMR: Research, Estimates) shares closed Tuesday on the New York Stock Exchange at $3, up 90 cents, or 42.9 percent.  Top of page


-- staff and wire reports




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.