American Airlines buys stakeAmerican Airlines plans to pay...

BUSINESS DIGEST

December 30, 1992

American Airlines buys stake

American Airlines plans to pay $195 million for a one-third stake in Canadian Airlines International and will help administer the struggling carrier under a 20-year contract, the two companies said yesterday.

The unusual deal, which American valued at more than $2 billion, marks the latest international alliance in an industry that has suffered two years of economic downturn, weak demand and record losses. The parent company of Canadian Airlines, PWA ** Corp., based in Calgary, Alberta, had been pursuing an alliance with American's parent, AMR Corp., since PWA failed to consummate a merger with its domestic rival, Air Canada, earlier this year.

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