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US Airways and American Airlines merge after antitrust suit

american airlines


by Joseph Earnest  December 9, 2013


Newscast Media WASHINGTON—American Airlines and US Airways have merged, creating the world's largest carrier and overcoming concerns the deal would hurt consumers. An antitrust lawsuit had stalled the merger in August.

AMR Corporation - the former parent of American Airlines - and US Airways Group announced in a statement on Monday they had completed the deal after AMR emerged from bankruptcy protection. The goliath new American Airlines Group will provide nearly 6,700 daily flights to more than 300 destinations in 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 plan to create a third giant carrier to compete with domestic rivals United and Delta cleared a major hurdle in November after the US Justice Department announced a settlement to resolve antitrust complaints seeking to block the merger . Six US states and Washington, DC, also tried to stop the deal, alleging that the new carrier would have near-monopoly power in some routes and airports.

The lawsuit had argued that the combination would mean that, counting Delta and United, four carriers - which, according to the complaint, have a history of "tacit coordination" instead of competition - would control over 80 percent of the US commercial air travel market. The antitrust suit had argued that US Airways and American alone competed directly on more than 1,000 routes.

Under the agreement reached, AMR and US Airways will give up takeoff slots and other rights at seven key airports to low-cost carriers. The two airlines will abandon 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 will, however, maintain its hubs at New York's JFK, Los Angeles International, Miami, Chicago's O'Hare, Philadelphia, Phoenix and Charlotte airports for three years. On Monday, the companies announced no immediate change to their operations. The integration of the two companies' fleet and workforce to achieve a Single Operating Certificate would take approximately 18 to 24 months, the airlines announced.

On significant near-term change for consumers will come March 30, when US Airways will exit Star Alliance and enter the Oneworld group the next time, home to American, 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 announced.

American had filed for bankruptcy protection in late 2011, but in September won approval from a court to go ahead with the $11 billion merger plan announced in February. The companies now expect the new American Airlines to generate more than $1 billion (730 million euros) a year in synergies by 2015. Add Comments>>


 Source: Deutsche Welle















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