November 15, 2012 / 3:43 AM / 8 years ago

AMR chief updates creditors on U.S. Airways talks: WSJ

(Reuters) - The chief executive of bankrupt AMR Corp AAMRQ.PK, parent of American Airlines, told creditors that a merger with US Airways Group Inc LCC.N would need to result in creditors receiving a large share of equity in a combined airline for a deal to proceed, the Wall Street Journal reported.

Chief Executive Tom Horton made the comments as part of an update on merger discussions during a gathering of the airline’s official creditors committee, which holds sway over how AMR will exit bankruptcy, the Journal reported, citing people close to the discussions.

AMR declared bankruptcy last November. The company has said it must save more than $1 billion in labor costs to become profitable.

Horton expects American Airlines creditors to receive more than 70 percent of the shares of a combined airline, the people told the paper.

Reporting by Sakthi Prasad; Editing by Matt Driskill

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