AMR Corp. in February allocated $339 million in reorganization costs due mainly to the rejection of municipal bonds on facilities at Dallas/Fort Worth International Airport (DFW) and its maintenance operation at Fort Worth Alliance Airport.
The costs contributed to $375 million in reorganization expenses during the month, some $87 million more than was allocated to the company’s restructuring in December and January combined. The February reorganization costs also included $21 million for renegotiated or rejected aircraft leases, while the remaining $15 million was allocated to professional fees, which is about the same as previous months.
AMR’s rejection of its DFW facility revenue bonds does not affect services or gate access at its home airport, but the airline in a late February court filing argued that the payment terms “constitute an unnecessary ongoing expense” as it restructures its operations. At Fort Worth Alliance, however, AMR intends to cease operations and therefore has no need for the maintenance facility located there.
In addition to addressing the facility bonds, AMR in February also reached agreement on new financing terms for 136 aircraft, comprising 70 MD-80s, six-800s, 36 -200s, 11 -200ERs and 13 767-300ERs, the company says in its monthly financial update.
That update also details an operating loss of $186 million for the month on $1.8 billion in revenue and close to $2 billion in operating costs. Net losses, however, totaled $619 million with the addition of a $58 million non-operating expense and the $375 million reorganization charge.
AMR’s cash position, however, improved in February, growing $58 million while the company’s short-term investments rose $448 million to $$4.2 billion.
-Darren Shannon, email@example.com