FORT WORTH, Texas - American Airlines announced today that in light of its precarious financial condition it will be relying on the grace periods included in certain of its debt and lease obligations while it continues negotiating restructuring agreements with its various stakeholders.
The company reached significant tentative agreements with its three organized labor unions yesterday, a major step forward in achieving the company’s continued preference for a consensual solution to its financial restructuring.
Still, American’s financial condition is weak and its prospects remain uncertain. Not only must American Airlines secure ratification of its new union agreements, but the company absolutely must secure meaningful concessions from its vendors, lessors and suppliers.
Given the impact of the continuing war in Iraq and the weak economic conditions that are negatively impacting both American and the industry, the days ahead will be difficult and the success of American’s joint efforts is not yet assured. However, the company remains optimistic that with meaningful cooperation from all parties involved in the consensual restructuring process, American’s ability to succeed in these challenging times is significantly improved