American Airlines, US Airways announce merger

American Airlines, US Airways announce merger

New York City : NY : USA | Feb 13, 2013 at 11:18 PM PST
Views: Pending
American Airlines merger with US Airways

US Airways and American Airlines announced a merger Thursday. The move would create the world’s largest airline and place 86 percent of domestic air travel business in the hands of four big carriers. Reports suggest that the merger plan have already been approved by the boards of both carriers.

The merger’s resulting corporation will retain the name American Airlines, but the current US Airways boss, Doug Parker, is likely to be the chief executive officer. Its head office will be in AA’s Dallas-Fort Worth base in Texas.

The new airline company will be closer in worth to competitor Delta Airlines, which has a market value of around $11 billion. Moreover, the merger would save from insolvency American Airlines, which filed for bankruptcy protection more than a year ago.

Analysts think that the merger could generate a fresh wave of competition at the Reagan National Airport, where AA and US Airways have considerable overlap. Together, the two airlines will have a monopoly of more than 68% of the domestic US air travel, a condition that has the potential to worry competition regulators.

It is pertinent to mention here that the deal would require approval from regulators and a US bankruptcy court before becoming effective. Moreover, air travelers are likely to notice any changes years after the new AAs start its operations.

The merger comes after a phase of extreme consolidation for the domestic airline industry, with Delta Airlines linking up with Northwest and Continental with United.

However, forecasts for 2013 indicate that the domestic airline sector would be the healthiest when it comes to absolute profit on a global level.

Some analysts think that the marriage of AA and US Airways may not perk up the company’s profits, given that size alone does not guarantee more profitability. It is pertinent to mention here that Southwest Airlines is the largest in terms of profitability both internationally and domestically, yet it is not the largest.

“American and US Airways control the lion’s share of slots at National,” said William S. Swelbar, a researcher at the MIT International Center for Air Transportation, according to the Washington Post. “I expect that the regulators will force a combined American-US Airways to divest themselves of some of the slots, and competitors would be free to compete for those available slots.”

1 of 9
American Airlines and US Airways will merge, which will make them the largest airline in the world.
Kamran Ahmed is based in Seattle, Washington, United States of America, and is an Anchor on Allvoices.
Report Credibility
  • Clear
  • Share:
  • Share
  • Clear
  • Clear
  • Clear
  • Clear

News Stories

  • American Airlines approves merger with US Airways

      Washington Post
    Described as the last airline mega-merger in a decade of consolidation, the marriage would see the US Airways brand consigned to the dust bin of aviation history, joining Pan Am, TWA, Eastern Air Lines, Northwest and Continental. The agreement was...
  • DealBook: American and US Airways Vote to Join Into Biggest Carrier

      The New York Times
    Mike Theiler/Reuters Express and planes at the Washington National Airport in Arlington County, Va. Ending a yearlong courtship by US Airways, American Airlines agreed on Wednesday to merge with the smaller carrier, paving the way for the creation of...
  • American-US Airways merger moves forward

      United Press International
    The boards controlling American Airlines and US Airways green-lighted an $11 billion merger to be announced Thursday that creates the world's largest airline. The morning announcement, which the Fort Worth (Texas) Star-Telegram said would be held at...
  • American Airlines and US Airways set to merge

      Al Jazeera
    36 US Airways and American Airlines merger to be officially announced on Thursday, according to sources [Reuters] The boards of American Airlines and US Airways have approved a merger  to create the largest US airline once American exits bankruptcy...
  • American Airlines and US Airways merge to officially become the world's ...

      Mail Online UK
    13 February 2013 American Airlines and US Airways will official merge and become the world's biggest airline after the boards of both companies approved the deal late Wednesday. The carrier will keep the American Airlines name but will be run by US...
  • American, US Airways said to approve merger

      Los Angeles Times
    The transaction would create the nation's largest carrier and cap an era of consolidation in a troubled industry. The marriage of American, based in Fort Worth, and its smaller competitor based in Tempe, Ariz., would form an airline valued at $11...





More From Allvoices

Report Your News Got a similar story?
Add it to the network!

Or add related content to this report

Most Commented Reports

Use of this site is governed by our Terms of Use Agreement and Privacy Policy.

© Allvoices, Inc. 2008-2014. All rights reserved. Powered by PulsePoint.