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.
-- staff and wire reports
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