American Airlines-US Airways merger formally announced
The latest in a series of airline mergers and acquisitions was formally announced Thursday morning, creating a mega-carrier that is expected to dominate its competitors in size and resources.
As expected, the boards of AMR Corp. and US Airways Group formally announced that they had voted unanimously to unite the two companies under the American Airlines name, with headquarters in Fort Worth, Texas.
“Today, we are proud to launch the new American Airlines -- a premier global carrier well equipped to compete and win against the best in the world,” said AMR Chief Executive Tom Horton, who will take the role of executive chairman of the combined board of directors for at least a year.
Doug Parker, chief executive of US Airways, will serve as CEO of the new airline and as a member of the board.
US Airways officials have pushed for the merger since soon after AMR filed for bankruptcy in 2011. The merger, if approved by the bankruptcy court and federal regulators, will allow AMR to to exit bankruptcy.
Under the deal, equity in the new carrier will be split, with 72% to AMR’s stakeholders and creditors and 28% to US Airways shareholders.
In statements issued Thursday morning, officials of the two airlines did not discuss how long it might take to complete the merger, but industry experts say the process could take months and create headaches for passengers.
The combined airline, valued at $11 billion, will offer more than 6,700 daily flights to 336 destinations in 56 countries, officials said.
“As part of this process, after months of exhaustive analysis and a thorough review of all alternatives, we concluded that this merger is the best outcome for our company, delivering not only the greatest value for our financial stakeholders but also positioning us well for sustainable success over the long term,” said Horton, who had previously resisted the idea of a merger to exit bankruptcy.
Parker hinted that the merger will ensure that employee salaries grow.
“This merger will create a stronger company, with the path to improved compensation and benefits and greater long-term opportunities for all our employees,” he said.
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