The chief executive of bankrupt AMR Corp , parent of American Airlines, told creditors that a merger with US Airways Group Inc 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.
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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)