AMR Corp.'s American Airlines, which has agreed to sharefinancial information with suitor US Airways Group Inc., is seekinga one-month extension of a deadline for filing a plan torestructure and exit bankruptcy.

American, which faces a Dec. 28 deadline to submit the plan incourt, asked for an extension to Jan. 28 in a filing today in U.S.Bankruptcy Court in Manhattan. The request is supported by thecommittee representing unsecured creditors.

“American has made significant progress in its restructuring,”said Sean Collins, a spokesman for the airline. “This work, whileprogressing well, takes time, and American and the unsecuredcreditors' committee believe that the proposed 30-day extension isappropriate for this process to continue in an orderly andefficient manner.”

The Fort Worth, Texas-based airline, which will mark itsone-year anniversary in bankruptcy next month, is working withcreditors on a “collaborative review” of strategic alternatives andhas reached a so-called nondisclosure agreement with US Airways“and others,” it said in the filing. US Airways backs a tie-up ofthe companies.

US Airways rose 1.4 percent $11.58 at the close in New York,leading gains among U.S. airlines. The shares have more thandoubled this year on speculation that the fifth-largest U.S.carrier would succeed in a takeover of No. 3 American.

Dennis Tajer, a spokesman for the Allied Pilots Association,which represents American's pilots, called the request for anextension “a positive” given the company's agreement with Tempe,Arizona-based US Airways.

Parties Talking

“Considering US Air and AMR are in discussions, we are pleasedand can only assume that as long as the parties are talking,progress is being made,” he said in a phone interview.

The union for American's flight attendants told members in ane-mail that it is encouraged that US Airways and American “have hadsubstantive conversations and hopeful that this extension willbring us another step closer to a merger inside bankruptcy.”

AMR's $460 million of convertible, unsecured 6.25 percent notesdue October 2014 gained 0.5 cent to 66 cents on the dollar at 10:59a.m. in New York, according to Trace, the bond-price reportingsystem of the Financial Industry Regulatory Authority. They havealmost quadrupled from 17.5 cents on Nov. 29, when AMR filed forbankruptcy.

Pilot Negotiations

American said in the court filing that it also needs time tocontinue negotiations with pilots on a new labor contract andanalyze $292 billion in claims filed against the company as part ofthe bankruptcy case.

The approval of U.S. Bankruptcy Judge Sean Lane, who isoverseeing AMR's bankruptcy, is needed to extend the deadline. Ifgranted, it will prevent others from proposing competing plans withthe court.

American said that without an extension it would face “thethreat of multiple plans, unnecessary adversarial situations andconfrontations and a deterioration of the orderly” bankruptcyprocess.

The bankruptcy case is In re AMR Corp., 11-15463, U.S.Bankruptcy Court, Southern District of New York (Manhattan).

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