AMR Counters US Airways Bid With New Seat Plan, Better Stats
DALLAS ( TheStreet) -- Bankrupt AMR (AAMRQ.PK) stepped up its resistance to the takeover bid by US Airways, (LCC), unveiling new passenger amenities including lie-flat business class seats and also releasing strong April unit revenue results.
"We have a lot of challenges ahead of us," said Virasb Vahidi, AMR chief commercial officer, in an interview following a media event, held aboard a Boeing 777-200 and focused on improved technology and fleet modernization efforts. "Our transformative initiatives are a clear signal to our customers and to our people that we believe in our future."
American's fleet modernization plan includes lie-flat seats in its fleet of 47 Boeing 777-200s and in the approximately 30 767-300s it intends to keep, as well as increased legroom in a new coach product called Main Cabin Extra, which will be available to premium passengers as well as to passengers who pay extra.
"Our plan is to bring this airline back to the leadership position where it belongs," Vahidi said. Earlier, he defined American as "this nation's flag carrier." As for continuing efforts by US Airways to gain backing from labor and from Wall Street analysts for its takeover bid, Vahidi called it "a lot of noise in the background (with) no impact on the process, which needs to be followed step by step."In the current case, AMR has exclusivity until Sept. 28 to submit a plan of reorganization. By definition, the bankruptcy process looks favorably upon a debtor-in-possession's reorganization plan, although creditors have some influence. How much is uncertain. Vahidi noted that AMR has recently been discussing its plan with Wall Street analysts. He anticipates support, he said, "once the analysts start to understand the details." In April, American reported that its passenger revenue per available seat mile grew at 11.6% over the same month a year earlier, apparently the highest growth in the industry, a result of high load factors and a strong pricing. Vahidi said a key factor is that, after long delays, the impact of American's joint ventures across the Atlantic and Pacific is starting to kick in: Delta (DAL)has said several times, on earnings conference calls, that it can easily take years to realize the full benefit of such deals.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV