LONDON (Reuters) - British Airways and Iberia parent IAG (ICAG.L) said its transatlantic joint venture with American Airlines would continue to operate as normal after AMR Corp AMR.N, the carrier’s parent company, filed for bankruptcy protection.
“We have every confidence in the future of American Airlines. We are pleased they are taking this step which shows commitment and determination,” IAG, which has a joint venture with American Airlines on transatlantic routes, said in a statement on Tuesday.
AMR Corp filed for voluntary Chapter 11 bankruptcy protection earlier on Tuesday after failing to win a deal with pilots earlier this month to pare its labour costs.
“Our joint business, which is a revenue sharing agreement, continues to operate as usual,” IAG added.
Shares in IAG, which have fallen 11 percent in the last three months, were 2.1 percent down at 141.5 pence by 1445 GMT, valuing the company at around 2.7 billion pounds.
American said the bankruptcy would have no direct legal impact on operations outside the United States and it was not considering debtor-in-possession financing.
“From a bookings perspective perhaps an airline in chapter 11 could be less attractive to consumers so sentiment could be hit,” said Stephen Furlong, an analyst at Davy Stockbrokers.
“I don’t think this will change IAG’s strategy though and American will continue to be an important part of its business.”
Earlier this year American Airlines placed one of the largest aircraft orders in aviation history with planemakers Boeing Co (BA.N) and Airbus EAD.PA, which could total more than 900 airliners, valued at nearly $40 billion.
American placed an initial order for 260 Airbus A320 aircraft with an option to buy an additional 365 for a possible total order of 625. The airline also placed an initial order with Boeing for 200 of its 737-family of aircraft, with options to buy an additional 100. If all the options are exercised, Airbus will deliver a full two-thirds of American Airlines’ new narrowbody fleet.
Shares in Airbus owner EADS were 3.2 percent down at 20.66 euros by 1440 GMT, while Boeing shares in New York were up 0.8 percent at $65.54.
AMR had been the only major U.S. carrier to avoid bankruptcy proceedings in the past decade, a move its rivals had used to restructure their labour agreements and cut costs.
Finland-based carrier Finnair (FIA1S.HE), part of American Airlines’ oneworld alliance, said it was confident American would be able to pull through by lowering their cost base.
“I want to underline that all other American air carriers have already gone through this process, so they are the last one here. They will continue their operations as usual, so the filing will not have an impact for their customers nor the oneworld cooperation which we have with them,” said Finnair spokeswoman Paivyt Tallqvist.
Editing by Adveith Nair and David Cowell