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L.A. Seeks 21.5 Million from American Airlines over Airport Costs

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Only a month after emerging from bankruptcy, American Airlines faces a claim from the city of Los Angeles for $21.5 million in fees charged to operate out of Los Angeles International Airport, the Los Angeles Times reported yesterday. The city asked a bankruptcy judge for permission to file a lawsuit to collect maintenance and operating fees from American, alleging that the airline has been underpaying LAX since Dec. 31, 2010. At the heart of the dispute is a method that LAX adopted in 2006 for calculating maintenance and operating fees charged to airlines that operate out of LAX. The new method raised the cost of operating out of LAX by adding charges for security and maintenance of private roads around the airport. Nearly every airline at the airport challenged the 2006 fee structure, including American, according to airport officials.

Los Angeles Wants Fee Fight With American in Federal Court

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Los Angeles wants a long-running battle over hangar fees with American Airlines to continue outside of bankruptcy court now that the airline has emerged from chapter 11 protection and merged with US Airways Group Inc., the Wall Street Journal reported on Saturday. Papers filed on Jan. 2 in bankruptcy court ask relief from the chapter 11 plan injunction barring continued legal action against American so Los Angeles can take its case to federal court in California. The dispute over how much American should pay for a leased hangar at Los Angeles International Airport started out in federal court in California seven years ago, attorneys for the city noted. American has asked a bankruptcy judge to decide the fight and find that it owes nothing to Los Angeles. The city says that it is owed $21.5 million plus interest, a debt Los Angeles insists must be paid as the new American Airlines Group Inc., the company created by the merger, continues to use the hangar.

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Evergreen Air Files for Bankruptcy After Push for Payment

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Evergreen International Airlines Inc., a provider of air freight and transport services, sought bankruptcy protection yesterday two weeks after creditors asked a court to force the company to pay off its debt, Bloomberg News reported yesterday. The bankruptcy petition cited as much as $100 million in assets and as much as $500 million in debt. Some creditors filed papers on Dec. 17 in the U.S. Bankruptcy Court in Brooklyn, N.Y., seeking to force McMinnville, Ore.-based Evergreen to pay its bills, according to the Delaware petition. Also seeking chapter 7 protection were affiliates Supertanker Services Inc. and Evergreen Defense and Security Services Inc.

American Airlines US Airways Complete Merger

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American Airlines Group Inc. was born on Monday after AMR Corp.'s American Airlines stepped out of bankruptcy and merged with US Airways Group Inc., the Wall Street Journal reported yesterday. Under the terms of the stock-swap merger, US Airways shareholders received 28 percent of the new company's shares, while AMR's creditors and equity interests are slated to receive the rest. The two-year restructuring and complex merger agreement will repay AMR's creditors with interest and give its big unions and common holders a big portion of equity in the new company.

Supreme Court Justice Denies Stay in Airline Merger

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A U.S. Supreme Court justice on Saturday night denied a last-ditch effort by a group of consumers and travel agents to stop the merger of American Airlines and US Airways, Reuters reported yesterday. The application was denied by Justice Ruth Bader Ginsburg, the court's public information office said. The combination of American's parent, AMR Corp, and US Airways Group would create the world's largest carrier and follow last month's resolution of antitrust objections by the U.S. Department of Justice. In their appeal to the Supreme Court, plaintiffs led by California resident Carolyn Fjord warned that "irreparable injury" could be caused to the domestic airline industry if the deal goes ahead as planned. They fear the merger will drive air travel prices up and service down and make planes more crowded. The merger is expected to be consummated before the opening of U.S. securities markets today. A federal judge on Friday rejected the previous attempt by the group to stop the merger.

LaGuardia Flights in AMR Merger Sold to Southwest Virgin

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Southwest Airlines Co. and Virgin America Inc. are poised to add flights at New York’s LaGuardia Airport as American Airlines and US Airways Group Inc. pull back there to settle the U.S. antitrust lawsuit against their merger, Bloomberg News reported yesterday. Southwest, the biggest discount carrier, will buy 12 new flight slots, enough for six daily round trips, along with 10 slots now leased from American, the Federal Aviation Administration said in a regulatory filing. Virgin America will get 12 flight slots. The FAA said that it approved the transactions after the U.S. Justice Department required that American and US Airways divest flight rights as a condition of their merger, which is set to close on Dec. 9. Talks are under way on how American and US Airways will divest slots for 104 daily flights at Washington, D.C.’s Reagan Airport.

American Airliness New CEO Seeks to Top 1 Billion Goal in Merger

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Doug Parker, poised to lead the new American Airlines Group Inc., wants to beat a $1 billion goal for added revenue and savings in the AMR Corp.-US Airways Group Inc. (LCC) merger and is about to start meshing frequent-flier plans, Bloomberg News reported today. Parker will take the helm of a carrier that will sit atop the global industry by traffic after the $17.8 billion all-stock deal. He will have to knit together two networks to challenge United Continental Holdings Inc. and Delta Air Lines Inc., which now rank first and second in the world. The merger is set to close Dec. 9.

Shares of Bankrupt American Airlines Go Sky High for Investors

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As bankrupt American Airlines parent AMR Corp. prepares to close a merger with US Airways Group Inc., the stock trades at just below $11, and a small group of investors who bet on it when it was flying low when it filed for bankruptcy in 2011 are poised to reap one of the biggest bankruptcy windfalls in years, the Wall Street Journal reported today. That is thanks in part to a little-noticed quirk in the deal that means their holdings could translate into much larger stakes than previously expected in the combined airline, to be called American Airlines Group Inc. For an investor who bought American shares at their lowest closing price two years ago, the increase of more than 40 times to its current level is the best return over that period of any U.S.-listed company with a market value today of at least $300 million, according to a Wall Street Journal analysis of data from FactSet.

AMR Merger Settlement Approved by Bankruptcy Judge

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American Airlines parent AMR Corp. won bankruptcy court approval of the deal it reached with regulators to complete its $17.2 billion merger with US Airways Group Inc. and create the world’s biggest airline, Bloomberg News reported on Thursday. The accord with the U.S. Justice Department, which agreed on Nov. 12 to drop its antitrust challenge if the carriers gave up some airport slots, was approved today by U.S. Bankruptcy Judge Sean Lane. “The settlement easily satisfies” bankruptcy requirements and the merger may be consummated without delay, Judge Lane said at a hearing. A group that sued to block the deal “utterly failed” to prove the merger would harm them, he said. AMR, based in Fort Worth, Texas, intends to complete the merger on Dec. 9 and rename the company American Airlines Group Inc. The last day of trading of all outstanding securities of AMR and the common stock of US Airways will be Dec. 6, according to a company statement.

AMR Seeks Court Approval for Settlement Paving Way to US Airways Merger

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The parent company of American Airlines yesterday asked a bankruptcy court to approve a settlement with U.S. regulators that would allow it to merge with rival US Airways Group and create the world's largest airline, Reuters reported yesterday. Stephen Karotkin, a lawyer for AMR Corp, said that the settlement resolving the U.S. Justice Department's antitrust objections was not opposed by any of the company's creditors. The only opposition came from a group of consumers who had sued the airlines in a separate case alleging that the merger would lead to higher prices, more crowded planes and more expensive in-flight amenities. The group sought a temporary restraining order blocking the plan from going into effect.