WASHINGTON DC, USA – American Airlines emerged as the world’s largest airline Monday, December 9, combining with US Airways after a hard-fought battle to overcome US competition concerns.
AMR Corporation, the parent of American Airlines, and US Airways Group announced they had completed the deal after AMR emerged from bankruptcy protection.
The new American Airlines Group is a goliath, providing nearly 6,700 daily flights to more than 330 destinations in more than 50 countries.
“Our people, our customers and the communities we serve around the world have been anticipating the arrival of the new American,” said Doug Parker, chief executive of American Airlines and the former chairman and CEO of US Airways.
“We are taking the best of both US Airways and American Airlines to create a formidable competitor, better positioned to deliver for all of our stakeholders. We look forward to integrating our companies quickly and efficiently so the significant benefits of the merger can be realized.”
The creation of a third giant carrier to compete with US rivals United and Delta cleared a major hurdle in November after the Justice Department announced a settlement to resolve antitrust concerns.
Under the agreement, AMR and US Airways are giving up slots and other rights at seven key airports to low-cost airlines.
The two airlines are abandoning a significant number of slots at two of the busiest airports on the East Coast – 34 at New York’s La Guardia and 104 at Washington’s Reagan National.
The new American is committed to maintaining hubs in New York’s Kennedy International, Los Angeles, Miami, Chicago’s O’Hare, Philadelphia, Phoenix and Charlotte for three years.
The companies said Monday there would be no immediate change to their operations. The integration of the two companies to achieve a single operating certificate is expected to take 18 to 24 months.
As part of the combination, US Airways will exit Star Alliance on March 30 and will enter the next day the Oneworld Alliance, joining American with airlines including British Airways, Cathay Pacific, Japan Airlines and Qatar Airways.
“Customers will begin to see enhancements to their experience in early January, including the ability to earn and redeem miles when traveling on either American Airlines or US Airways, reciprocal American Admirals Club and US Airways Club benefits, and reciprocal elite recognition,” the companies said.
Headquartered in Fort Worth, Texas, synergies from the merger are expected to generate more than $1 billion a year in additional financial benefits by 2015, they said.
Flight attendants of both carriers cheered the merger.
“Christmas has come early,” said Laura Glading, president of the Association of Professional Flight Attendants, the union representing the staff at American.
“It’s been a long, tough slog, but today our hard work has paid off.”
Roger Holmin, head of the Association of Flight Attendants unit at US Airways, said: “We proudly stand shoulder-to-shoulder with our new American flying partners and we cheer the end of the American bankruptcy.”
Shares in American Airlines Group, trading under the ticker symbol AAL, debuted on the Nasdaq exchange at $23.95. The stock closed at $24.60.
The $11 billion merger was first announced in February, but was held up by an antitrust lawsuit from the US government and backed by several states, worried about the combined airline’s potential monopoly power.
The lawsuit argued that the tie-up would mean four airlines – which it said have a history of “tacit coordination” instead of competition – would control more than 80 percent of the US commercial air travel market.
US Airways and American alone compete directly on more than 1,000 routes, it argued. – Rappler.com