FOR RELEASE: Thursday, May 15, 2003
AMR ANNOUNCES COST-REDUCTION AGREEMENTS WITH SUPPLIERS, LESSORS, AND CREDITORS THAT WILL SAVE MORE THAN $175 MILLION A YEAR
FORT WORTH, Texas – AMR Corp. reached another major milestone in its long-term cost restructuring efforts today with the announcement that it 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. These agreements will generate cumulative savings for the company of more than $1 billion.
During the past two years, AMR has identified approximately $2 billion a year in cost savings through a wide range of initiatives, 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 AMR’s costs by an additional $1.8 billion a year.
The final piece of AMR’s overall $4 billion-a-year cost-reduction effort was to reach agreement on meaningful concessions with AMR’s suppliers, lessors, and other creditors.
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. 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.
AMR will issue up to three million shares of common stock to suppliers, lessors, and other creditors to enable them to share in the upside of the company’s future in return for their support of AMR’s cost reduction efforts.
Statements in this news release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, which represent the Company’s expectations or beliefs concerning future events. When used in this news release, the words expects, anticipates, and similar expressions are intended to identify forward-looking statements. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements are subject to a number of factors that could cause actual results to differ materially from our expectations, including the uncertain financial and business environment for the Company even with the ratification of the labor agreements and the completion of the agreements on concessions with the Company’s suppliers, aircraft lessors and other key creditors. These uncertainties include, but are not limited to, the struggling economy, high fuel prices, conflicts in the Middle East, the SARS outbreak and historically low fare levels. Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Form 10-K for the year ended December 31, 2002 and the Form 10-Q for the quarter ended March 31, 2003.
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AMR ANNOUNCES COST-REDUCTION AGREEMENTS WITH SUPPLIERS, LESSORS, AND CREDITORS THAT WILL SAVE MORE THAN $175 MILLION A YEAR
FORT WORTH, Texas – AMR Corp. reached another major milestone in its long-term cost restructuring efforts today with the announcement that it 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. These agreements will generate cumulative savings for the company of more than $1 billion.
During the past two years, AMR has identified approximately $2 billion a year in cost savings through a wide range of initiatives, 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 AMR’s costs by an additional $1.8 billion a year.
The final piece of AMR’s overall $4 billion-a-year cost-reduction effort was to reach agreement on meaningful concessions with AMR’s suppliers, lessors, and other creditors.
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. 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.
AMR will issue up to three million shares of common stock to suppliers, lessors, and other creditors to enable them to share in the upside of the company’s future in return for their support of AMR’s cost reduction efforts.
Statements in this news release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, which represent the Company’s expectations or beliefs concerning future events. When used in this news release, the words expects, anticipates, and similar expressions are intended to identify forward-looking statements. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements are subject to a number of factors that could cause actual results to differ materially from our expectations, including the uncertain financial and business environment for the Company even with the ratification of the labor agreements and the completion of the agreements on concessions with the Company’s suppliers, aircraft lessors and other key creditors. These uncertainties include, but are not limited to, the struggling economy, high fuel prices, conflicts in the Middle East, the SARS outbreak and historically low fare levels. Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Form 10-K for the year ended December 31, 2002 and the Form 10-Q for the quarter ended March 31, 2003.
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