American Airlines allowed to cancel some jet leases



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Posted on December 22, 2011 at 7:56 PM

FORT WORTH - U.S. Bankruptcy Judge Sean Lane will allow American Airlines to cancel leases on some aircraft and engines that the airline has previously grounded in desert storage. And the airline can continue to take delivery on 32 new Boeing jets.

In court on Thursday, American's lead bankruptcy attorney, Harvey Miller, said the airline's business is vibrant, according to Bloomberg.

At the same time, Miller accused American's creditors of "bushwacking" the airline by questioning how it's spending a $4.8 billion bankruptcy emergency fund.

But according to Josh Gotbaum of the Pension Guaranty Benefit Corporation (PGBC), that's the kind of flamboyant statement bankruptcy attorneys are supposed to make.

"That's part of their job," Gotbaum said. "And that means every time somebody says something, you need to ask, 'What is he saying, is it the gospel? Or is he saying it because his client wants him to say it?'"

Last week, Miller got attention by saying American employees would be losing their pensions. Gotbaum, whose agency works to help preserve pensions, says that's not necessarily the case.

"A lot of employees at Delta [Airlines] didn't have their pension killed," he said. "The employees at Northwest  [Airlines] did not have their pension killed. And the employees at Hawaiian Airlines, where I was, didn't have their pension killed. So that's what we want to achieve here."

He said pilots have the least chance of getting all their pensions made whole if the PGBC gets involved, because the agency has a ceiling on what it can pay individuals.