AMR to issue up to 3 million shares to suppliers, creditors for $175 million annual concessions

By Carlise Newman

Chicago, May 15 - AMR Corp. has completed agreements on concessions with more than 100 suppliers, aircraft lessors, and other key creditors that will save AMR in excess of $175 million a year and cumulatively more than $1 billion.

AMR said in a press release it will issue up to 3 million common shares to suppliers, lessors and other creditors.

The company said the agreements cap its $4 billion-a-year cost-reduction effort. During the past two years, AMR has identified $2 billion a year in cost savings, and last month AMR's three major labor unions ratified new agreements which, when coupled with changes in pay plans for management and non-union employees, will reduce the Fort Worth-based air carrier's costs by an additional $1.8 billion a year.

"We are grateful to each supplier, lessor, and creditor who tangibly expressed support for our company by granting these significant concessions," said AMR chief executive officer and president Gerard J. Arpey, in a news release. "We continue to move through the most challenging period in our history, and our success is still far from assured, but reaching these cost-reduction agreements with our suppliers, lessors, and creditors is another step forward and further strengthens AMR as we seek to put the company on a solid financial footing."

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