P. M. BRIEFING : AMR Reportedly Close to Buying Eastern’s Latin America Routes

AMR Corp., the parent of American Airlines, is close to striking an agreement to buy Eastern Airlines’ profitable Latin American routes for between $300 million and $400 million, an industry source said today.

“It is very close,” said the source, who asked not to be identified.

Officials at Eastern, a subsidiary of Texas Air Corp., and at AMR declined to comment.

In recent weeks, however, AMR officials confirmed that the two airlines have held discussions about the sale of the Latin routes for several months. The acquisition of the routes, which operate out of Eastern’s Miami hub, would strengthen AMR, already the largest U.S. carrier.

The deal would further erode Eastern, which has been shedding assets, including its Washington-New York-Boston shuttle service, since March when it filed under Chapter 11 of the U.S. Bankruptcy Code. The company filed for bankruptcy a few days after its machinists union went on strike.

Eastern has resisted a sale of its Latin American routes, one of its strongest services. But industry sources say Eastern resumed talks with AMR last month after it discovered that it was facing an unanticipated $200-million shortfall.