inflightboi175
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AMR, American Airlines want to reject leases and contract at San Juan airport
American Airlines and parent AMR filed a motion Thursday to reject American's leases and contracts at Luis Muñoz Marin International Airport in San Juan, Puerto Rico.
As American noted in its motion, it used to be big in San Juan, but it isn't anymore.
Since signing a new lease in 1996, "the Debtors have reduced operations at SJU significantly, and have no future plans to expand at SJU. However, the Debtors' costs of operation at SJU in the form of rental payments and costs to maintain and operate facilities have not been reduced by a comparable amount," the airline said in its motion.
"Although American shares its leasehold premises with other airlines operating in the same space, under the terms of the Amended and Restated Terminal Lease, American is obligated to maintain significant portions of the Terminal D facility, as well as the Federal Inspection Service Facility located there. This results in expenses that are disproportionate to American's actual operations at SJU," it wrote.
"In light of the foregoing, the Debtors' plan, among other things, is to enter into an operating agreement and a lease with the Authority similar to that of other airlines operating at SJU. This will allow the Debtors to use only the exclusive space necessary for their operations, with the Authority responsible for maintaining common areas and public use space including the Federal Inspection Service Facility," the motion continued.
The Puerto Rico Ports Authority in 1993 issued $29.81 million in special facility revenue bonds in 1993 and another $115.6 million in 1996. American's parent, AMR, guaranteed the payments.
In the motion, American said it believes the debt should be considered an unsecured obligation and be so treated in the bankruptcy case. But it filed the motion in case the agreements were executory contracts that needed the court's approval to reject.
http://aviationblog.dallasnews.com/archives/2012/05/amr-american-airlines-want-to.html
American Airlines and parent AMR filed a motion Thursday to reject American's leases and contracts at Luis Muñoz Marin International Airport in San Juan, Puerto Rico.
As American noted in its motion, it used to be big in San Juan, but it isn't anymore.
Since signing a new lease in 1996, "the Debtors have reduced operations at SJU significantly, and have no future plans to expand at SJU. However, the Debtors' costs of operation at SJU in the form of rental payments and costs to maintain and operate facilities have not been reduced by a comparable amount," the airline said in its motion.
"Although American shares its leasehold premises with other airlines operating in the same space, under the terms of the Amended and Restated Terminal Lease, American is obligated to maintain significant portions of the Terminal D facility, as well as the Federal Inspection Service Facility located there. This results in expenses that are disproportionate to American's actual operations at SJU," it wrote.
"In light of the foregoing, the Debtors' plan, among other things, is to enter into an operating agreement and a lease with the Authority similar to that of other airlines operating at SJU. This will allow the Debtors to use only the exclusive space necessary for their operations, with the Authority responsible for maintaining common areas and public use space including the Federal Inspection Service Facility," the motion continued.
The Puerto Rico Ports Authority in 1993 issued $29.81 million in special facility revenue bonds in 1993 and another $115.6 million in 1996. American's parent, AMR, guaranteed the payments.
In the motion, American said it believes the debt should be considered an unsecured obligation and be so treated in the bankruptcy case. But it filed the motion in case the agreements were executory contracts that needed the court's approval to reject.
http://aviationblog.dallasnews.com/archives/2012/05/amr-american-airlines-want-to.html
