American and US Airways to Merge, Combined Company to be World’s Largest Airline
Merged Airline to Keep American Name, Stay in Oneworld Alliance
The boards of directors of AMR, the parent of American Airlines, and US Airways separately voted today to approve a merger that will create the world’s largest airline. The formal announcement is scheduled for tomorrow, at which time a plan outlining the details of the deal will be filed with the U.S Bankruptcy Court in New York that is overseeing American’s reorganization. The deal will serve as American’s reorganization plan to take it out of bankruptcy.
Under the terms of the transaction, American’s creditors will own 72% of the combined airline, while 28% will be held by US Airways shareholders. US Airways CEO Doug Parker will serve as CEO of the merged airline and American CEO Tom Horton will serve as non-executive chairman for roughly one year.
Once the merger takes place, the airline, which will keep the American name, will have a market capitalization of more than $10 billion. The merged company’s board will be comprised of 12 directors, with four being appointed by US Airways, three being appointed by American, and five being appointed by American’s creditors.
The merger requires the approval of American’s bankruptcy judge as well as regulatory approval from the Department of Justice and other regulators in order for American to exit from bankruptcy.
(Photo: Accura Media Group)