US airlines clinch $11bn mega-merger
THE WORLD’S biggest airline will be unveiled this morning after the boards of American Airlines and US Airways voted late last night to merge the two businesses in an $11bn (£7bn) deal.
The combined company will have 1,500 aircraft, $39bn (£25bn) in annual revenues and employ more than 100,000 people.
US Airways chief executive Doug Parker is expected to head the combined business, which will see American Airlines exit bankruptcy proceedings after 15 months. American’s chief executive Tom Horton will stay on the board for another year as non-executive chairman. Up to $1bn annual savings are expected as a result of the deal.
The merger is set to give American creditors 72 per cent of ownership in the combined company and US Airways shareholders the rest. The company will have a board of 12 members: four from US Airways, three from American and five to be designated by the American creditors.
As part of the deal, US Airways will also leave the Star Alliance to join the oneworld global airline alliance, of which American Airlines is already a member along with British Airways.
US Airways will follow through on its agreement with American unions last year that the combined carrier would be branded American Airlines and be based in Fort Worth, Texas, where American is currently based, sources said. US Airways has its headquarters in Tempe, Arizona.
The US airline industry has seen a spate of consolidation over the last decade after United merged with Continental and Delta joined forces with Northwest.