American, US Airways Move Ahead With Merger, Announce Transition Team, File For Court Approval
American Airlines and US Airways, which announced plans to merge on February 16, filed for court approval of the merger and named executives from both airlines to lead the integration process.
The combined airline, which will retain the American Airlines name, will be the world’s largest airline by passenger traffic. AMR, American’s parent company, and its creditors field a 336-page motion with the U.S. Bankruptcy Court on Friday, seeking support of the merger. The court set a March 27 date for a hearing on the matter.
In the filing, the airline stated that the merger would result in annual net synergies of $1 billion by 2015, produce higher revenue, and ensure maximum recovery to AMR’s stakeholders, which include the unsecured creditors committee, its labor unions, and bondholders. According to the filing, American will spend $1.2 billion in transition costs over the course of three years.
On Monday, American CEO Tom Horton and US Airways CEO Doug Parker named two executives to lead the integration of the two airlines. The two are Bev Goulet, American’s chief restructuring officer, and Scott Kirby, US Airways’ president. Goulet has managed AMR’s restructuring under court supervision, an effort that has resulted in annual savings of over $2 billion. She also led the team that negotiated the final equity split for the combined airline, which will give AMR creditors 72% of the company and US Airways shareholders 28%. Kirby has been US Airways’ point person during the merger negotiations and worked hard to gain the support of labor from both airlines as merger discussions continued.
Last week, US Airways separately announced that the name American Airlines Group would replace the AMR Corp. name once the merger closes.
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