American Airlines and American Eagle Airlines, its regional airline affiliate, have asked a bankruptcy court for authority to hire an aircraft restructuring adviser and a labor cost analyst, respectively, court documents show.
In applications filed in AMR Corp.'s Chapter 11 reorganization case in U.S. Bankruptcy Court in New York, American and American Eagle asked to employ, respectively, SkyWorks Capital LLC of Greenwich, Conn., and Bain & Co. Inc. of Boston.
American and American Eagle employed the two firms as advisers before AMR filed its bankruptcy petition on Nov. 29, the companies said in court filings.
American proposes to pay SkyWorks restructuring fees of $445,000 a month for the first 15 months of its bankruptcy and $100,000 a month thereafter. In addition, the Fort Worth-based carrier proposes to pay SkyWorks a not-to-exceed gross transaction fee of $4.5 million on the effective date of AMR's reorganization or 15 months after filing of its bankruptcy petition.
American said SkyWorks' qualifications include working with Delta Air Lines, Japan Airlines and Cathay Pacific on financial restructurings, new capital raises and aircraft advisory services.
"SkyWorks has also become familiar with the debtor (AMR) and its business, including the debtor's financial affairs, debt structure, operations, employee groups, cost structures and related matters," American said in its application to employ the Connecticut firm. "SkyWorks not only worked with the debtor in an out-of-court restructuring in 2003 but has also assisted with multiple financings for the debtor over the past several years."
SkyWorks will assist American with the preparation of existing debt balance, debt payment, lease obligation, maintenance status and other relevant information by aircraft tail number and finance group type, the company said in court documents.
The consultant also will provide American with current fair market values and fair market rental values for aircraft in its 600-aircraft fleet, provide it with general information about aircraft availability and desirability in the market, define negotiating strategies for American in relation to individual creditors, creditor groups, key parties and/or aircraft and other services, court documents show.
American Eagle said it proposes to hire Bain & Co. to develop "a benchmarking analysis that identifies Eagle's relative cost position by employee group and calculates the degree of cost advantage or disadvantage. The assessed employee groups will include management, pilots, flight attendants, maintenance, fleet service clerks, dispatch and agents, and, to the extent that data is available, the analysis will cover the major cost drivers of wages and benefits, productivity and seniority.
"As part of this process, Bain will also help Eagle identify and structure potential labor solutions as part of the restructuring process," American Eagle said in court filings.
American Eagle proposes to pay Bain a monthly fee of $525,000 plus expenses.
American's application to employ SkyWorks and American Eagle's application to employ Bain & Co. are the second and third major consultants AMR has requested to hire to assist it in bankruptcy reorganization.
Two weeks ago, AMR asked for authorization to employ Rothschild Inc., the worldwide financial consultant, as its financial adviser and investment banker. AMR proposes to pay Rothschild a monthly fee of $200,000 and, upon the confirmation of a reorganization plan, a completion fee of $15 million.
In court filings, AMR said Rothschild will identify potential restructuring transactions, review and analyze AMR's assets and operating and financial strategies, business plans, financial projections and debt capacity as well as proposals for mergers, acquisitions or other business combination transactions.
