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February 04, 2013

Bond analyst views AMR court request for an extension as "stubborn refusal to step aside"

When AMR asked the bankruptcy court for an extra 15 days to file its reorganization plan, Gimme Credit bond analyst Vicki Bryan viewed it as "AMR management's stubborn refusal to step aside."

Bryan has been a harsh critic of AMR chief executive Tom Horton and the rest of American Airlines' management team since before the carrier entered bankruptcy in late 2011. She has also argued that a merger with US Airways makes the most sense for AMR investors and bond holders.

In a note to investors on Friday, Bryan took AMR's management to task for what she viewed as obstruction.

"AMR management has been coming off as more arrogant than confident, in our view, with destructive diversions and posturing that almost has boarded on the ridiculous. From CEO Tom Horton's "revelation" back in July that the merger with US Airways actually was his idea in the first place (oh really? If so, he apparently couldn't pull it off. See our note on 7/25/12) to the unveiling last week of expensive (and unappealing) corporate rebranding and garish new livery on planes that most likely will be owned by somebody else soon," she wrote in the note.

-Andrea Ahles


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I think that the bond analyst is completely correct in stating that American Airline's Management team as a way to obstruct and intimidate the bond holders into allowing American Airlines to exit bankruptcy without having to agree to a merger with US Airways. Horton intimated this earlier on making the statement that a merger would 'delay AMR's exit out of bankruptcy'. Why may I ask is this so? Horton keeps saying that he needs more time to present his plan for exit. Yet after all this time Horton and his management team have been unable to formulate and present a plan that someone will agree is a better way out of bankruptcy. How much more time does Horton need? It is almost comical to the point of absurdity. If I was going to assess Mr. Horton's ability to present a logical and coherent plan that makes perfect sense to everyone else I would most certainly give him a failing grade. In any college or university if a student couldn't produce the required work in time (without a valid reason) to his professor he would get a failing grade on that work. AMR's management request for more time is an attempt to postpone what everyone else thinks is inevitable and hold a multibillion dollar company and its employees hostage.


They don't call it arrogant airlines for nothing baby. There employees have been saying this for years.


On the way home, Vicki Bryant cashed her check from Doug Parker.

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