AMR, AIR CANADA REACH AGREEMENT ON CANADIAN AIR STOCK SALE

AMR, AIR CANADA REACH AGREEMENT ON CANADIAN AIR STOCK SALE

   Air Canada has reached an agreement with AMR Corp., parent of American Airlines, which paves the way for Air Canada to complete its acquisition of Canadian Air.
   Under the agreement, Montreal-based Air Canada will buy AMR’s preferred shares in Canadian at C$55 million to C$60 million. American Airlines will continue its codesharing and frequent flyer agreement with Canadian for 10 years. If Air Canada absorbs Canadian, the agreement provides provisions for American to maintain a marketing presence in Canada. American will also continue to provide some management services to Canadian.
   Air Canada said it plans to operate Canadian as a separate entity.
   The AMR-Air Canada agreement comes one day after the transport committee of the Canadian Parliament called for an easing of foreign ownership rules to provide air competition in the Canadian market.