American Airlines and US Airways set for merger announcement

Press Release   •   Feb 14, 2013 11:11 GMT

According to media and newswire sources, confirmation has been given that American Airlines and US Airways are planning to form one of the world's biggest airlines.

The two boards are said by a number of unnamed sources to have met on Wednesday to approve the merger, with a formal announcement expected on Thursday.

The boards of the two companies met separately to approve the combination, according to two people with knowledge of the vote. A merger would bolster American's domestic footprint, strengthen its presence in the Northeast and give it a bigger network to attract business travellers and corporate accounts.

The merger would create a rival with the size and breadth to compete against United Airlines and Delta Air Lines, which have grown through mergers of their own in recent years and are currently the biggest.

The lion's share of the new company will be owned by American Airlines' bankruptcy creditors, who will have 72% of the company.

The two companies have been in discussions since last August when they signed an agreement to exchange confidential information.

The carrier will be run under the American Airlines brand, but the chief executive is expected to be the current US Airways boss, Doug Parker.

Not including affiliates, it will have around 900 aircraft and run more than 3,000 flights, employing 100,000 people.

The wave of big mergers in the industry has created healthier and more profitable airlines that are now better able to invest in new planes and products, including Wi-Fi, individual entertainment screens and more comfortable seats for business passengers.

But some consumer advocates said they worried that reducing the number of airlines would lead to higher fares over the long run and allow airlines to increase revenue by imposing new or higher fees.

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