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American Airlines chief executive Tom Horton said in an internal letter that the company would explore a potential merger with another carrier, a move that could lead to further consolidation in the US airlines industry.
AMR, the parent company of American Airlines, filed for bankruptcy last November and has been working to restructure itself. It has an 18-month “exclusive period” in which the company can determine its own plan of reorganisation and reject proposals from third parties.
But Mr Horton said in his letter Tuesday that AMR had performed well in recent months, citing June results, which were released Monday.
“It is at this juncture that it now makes sense to carefully evaluate a range of strategic options, including potential mergers, which could make the new American even stronger,” said Mr Horton.
Other airlines are already circling AMR. US Airways, seen as the most serious, has already begun lobbying AMR’s unions and creditors. In May, US Airways began talks with TPG, the private equity group, about a possible joint bid for AMR. Combining AMR and US Airways would create the largest US airline.
Other potential merger partners include Delta Air Lines, the country’s second-largest carrier by volume, and JetBlue, the discount carrier.
“For many years, I have publicly been a proponent of consolidation as one path to a healthier US airline industry,” said Mr Horton. “We have assessed many possible combinations in the past, including, of course, an acquisition of US Airways. In fact last year I approached my counterparts at other airlines about the merits of possible combinations.”
That process is set to begin in earnest, with people familiar with AMR’s plans saying the company intends to approach other airlines and ask them to sign nondisclosure agreements in the coming weeks.
A tie-up between AMR and another major carrier would come on the heels of the merger of United and Continental, which created the biggest US carrier. Jeff Smisek, chief executive of United Continental Holdings, recently told the he supported a merger between AMR and US Airways.
But people familiar with AMR’s thinking said it was not set on a merger and that it was also pursuing a restructuring plan that would keep the company independent.