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American and US Airways May Announce a Merger This Week

American and US Airways May Announce a Merger This Week

After months of negotiations, American Airlines and US Airways may announce a merger later this week. The combined airline would overtake in size United Airlines and Delta Air Lines, both of which have grown through mergers of their own in recent years.

American, which has been in bankruptcy protection since November 2011, is currently the USA’s third-largest airline with domestic and international flights. US Airways is the fourth.

American Airlines

According to a report in the New York Times, the boards of both carriers are expected to meet some time this week to approve the combination, which then needs to be approved by a bankruptcy judge in New York. A merger also requires the approval of federal regulators and antitrust authorities, but analysts expect regulators to approve the deal as there is little overlap between the two networks and no hubs in the same cities.

US Airways

US Airways’ shareholders could end up with about 28% of the new airline, and American’s creditors would have 72%. A merger could be structured to take effect as American exits bankruptcy. The airlines are working for a deal before 15th February, when some nondisclosure agreements with American bondholders are set to expire. The timing of a possible deal, however, remains flexible.

The merged company would be called American Airlines and be based in Fort Worth. It would have a combined 94,000 employees, 950 aircraft, 6,500 daily flights, nine major hubs, and total sales of nearly US$39 billion.

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NEIL STEEDMAN has been a trade journalist, copywriter, editor and proofreader for 50 years, and News & Features Editor for ‘Irish Travel Trade News’ for the past 40 years.

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