Airlines join forces in $11bn merger
US Air’s management team, led by chief executive Doug Parker, will assume operational control of the airline, while AMR creditors will wind up owning 72% of the combined carrier and take five seats on the 12-member board. US Airways will have four seats on the board. The remaining seats will be filled by AMR representatives.
“It has been the most successful airline restructuring in history, and we had been very focused from the outset on creating the most value for our owners,” AMR chief Tom Horton said.
The carrier, which will bear the American Airlines name, will be 2% larger than current No 1 United Continental Holdings in terms of traffic.
The merger, subject to approvals from regulators and the US Bankruptcy Court, could help speed up the recovery of the US airline industry as carriers will have more room to boost fares as yet another competitor is eliminated.
“Wall Street has been enamoured of consolidation from an industry perspective because it will help control capacity,” said George Hamlin, president of Hamlin Transportation Consulting.
“But I’m not sure being large for its own sake is going to guarantee success. A lot of pieces need to be put together. A lot of pieces will need to be shed.”
The new American will be based in Dallas-Fort Worth, Texas.
Parker, who began pursuing a merger in early 2012, will be the chief executive.
— Reuters
