AMERICAN LOOKING TO WEST COAST; AIRLINE TO BUY RENO IN $124 MILLION DEAL.Byline: Katie Fairbank Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. American Airlines American Airlines Major U.S. airline. American was created through a merger of several smaller U.S. airlines and incorporated in 1934. It continued to buy the routes of other airlines, becoming an international carrier in the 1970s; its routes include South America, the will buy low-fare carrier Reno Air Reno Air was a scheduled passenger airline that provided service from its hubs at Reno/Tahoe International Airport in Reno, Nevada and San Jose International Airport in San Jose, California to destinations throughout the western United States, with limited service to the US east for $124 million as the nation's No. 2 carrier strengthens its California presence to better compete on the West Coast against United and Southwest airlines This article is about the American airline. For the former Japanese airline, see Japan Transocean Air. For the British airline, see Air Southwest. Southwest Airlines Co. . American, which is owned by Fort Worth, Texas-based AMR (1) (Adaptive Multi-Rate) A variable rate speech codec selected by the 3GPP for the 3G evolution of the GSM cellphone system (WCDMA). Using the Algebraic CELP (ACELP) compression technology, AMR provides toll quality sound at transmission rates from 4.75 to 12. Corp., said Thursday that it plans to operate the 6-year-old carrier as part of its regular system once the deal is approved by shareholders and government regulators. Reno and American already had close ties, operating for the past five years under a marketing partnership. The deal will boost American's ability to compete on the West Coast as well as Reno's financial recovery. AMR will make a cash tender offer at $7.75 per common share no later than Wednesday. In addition, AMR will make a $27.50 offer for each of Reno's outstanding preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . AMR shares closed down $1.625 at $63.125 on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. on Thursday. Reno closed up 12.25 cents at $7.375. Reno directors are recommending that shareholders tender their shares, and there is virtually no overlap on the routes served by the two carriers. Only one route, between San Jose and Las Vegas, is operated by both companies. Reno, which owns two jets and leases 25 aircraft, employs 2,000 workers. American expects to hire all of them. Pilots at the airlines will have a say in the deal. AMR says it doesn't expect many problems integrating the 310 pilots at Reno into American's system because Reno was founded in 1992 and most of the pilots would be junior to those at American. Candace Browning, an analyst with Merrill Lynch, said American is trying to protect itself on the West Coast. ``This is largely a defensive move,'' she said. This is the Fort Worth airline's second attempt at building a strong West Coast operation. In the late '80s, American bought a small West Coast airline named AirCal to pick up routes along the California coast. American ultimately absorbed AirCal and was forced to withdraw many of its airplanes from the area in the early 1990s because of stiff competition, eventually closing its hub in San Jose. |
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