AMR, US Airways merging to make world’s largest airline

Published on : Monday, February 18, 2013

US AirwaysChanging the face of the domestic airline industry, American Airlines and US Airways are headed for a merger. The airlines’ boards officially announced the deal, after news of the merger leaked widely. The new airline will be named American Airlines in homage to a brand that has fallen on harder times recently but is still widely recognized around the nation and the world.

But it will be run by US Airways CEO Doug Parker, who relentlessly pursued the merger even as AMR Corp., the parent company of American Airlines, was reorganizing in bankruptcy. The two carriers valued the deal at $11 billion.

The merger, if approved by American’s bankruptcy judge and by federal regulators,reduces the number of major airlines in the United States to four: The new
American Airlines (the largest); United Airlines; Delta Air Lines; and Southwest Airlines. Combined, the four control about 70 percent of the domestic air travel market.

The merged airline will offer more than 6,700 daily flights to 336 destinations in
56 countries.

While passengers are unlikely to notice any changes at first, eventually the merger
likely will mean higher fares, especially for business travelers under certain
conditions.

Together, they control about three-quarters of the U.S. market, which critics say
gives the industry less incentive to keep prices low.

American has been in bankruptcy since November 2011. AMR’s bankruptcy
creditors will own 72 percent of the combined airline, which will be based in Fort
Worth, Texas. US Airways shareholders will own the rest.

The merged company will have a board of 12 members: four from US Airways
including its chief executive Doug Parker, three from AMR including chief
executive Tom Horton and five to be designated by the AMR creditors, two of the
people said.

Source:-US Airways

One Response to AMR, US Airways merging to make world’s largest airline

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