AMR''s American seeks bankruptcy financing -sources

Todd B

Jan 11, 2003
Mon March 10, 2003 02:10 PM ET
CHICAGO, March 10 (Reuters) - AMR Corp.''s AMR.N American Airlines has quietly begun talks on Wall Street seeking up to $2 billion in bankruptcy financing should a Chapter 11 filing become necessary, a source familiar with the matter said on Monday.
They''re starting out with a very high, unreasonable request to raise $2 billion, said the source, who declined to be identified. The Fort Worth, Texas-based carrier is the world''s largest airline, followed by UAL Corp.''s UAL.N United Airlines, which filed for bankruptcy in December.
A spokesman for American declined to comment on the talks, which are taking place with a number of financial institutions. The airline is actively pursuing cost-cutting agreements with its labor unions as a way to avoid a bankruptcy filing.
Several sources said the talks are in the preliminary stages and would involve the usual range of lenders to large bankruptcy cases, including Citigroup C.N , J.P. Morgan Chase JPM.N , CIT Group CIT.N and perhaps Boeing Co. BA.N Citibank offers a credit card linked to American''s frequent flyer program.
AMR posted a record $3.2 billion net loss in 2002 and has outlined a goal to cut $4 billion in annual costs to stay afloat. It has hired bankruptcy lawyers and a financial advisory firm, sources have told Reuters.