American, US Airways boards approve merger: source
2/14/2013 2:08:52 AM
The boards of American Airlines and US Airways approved a merger to create the largest US airline by revenue once American exits bankruptcy court, a source close to the negotiations said.
The deal comes on the heels of a series of other recent airline mergers that have remade the US airline industry and better positioned the sector for profit.
Antitrust regulators and a US bankruptcy court must first give their approval before the merger can go forward, as American has been under bankruptcy protection since November 2011.
Under the all-stock deal's terms, American's creditors would own 72 percent of the combined airlines and US Airways the remainder, a personal familiar with the matter told AFP.
The deal follows a series of other US airline mergers that analysts say have left the US airline industry better positioned for long-term profitability.
A merger would assemble a powerful fleet of about 1,530 mainline and regional aircraft flying some 6,428 daily flights. Combined revenues of $38.7 billion in 2012 would put them slightly ahead of United and Delta Airlines.
The deal would help complete American's expected emergence from bankruptcy restructuring.
It would also cap a round of major airline deals that has remade the US airline business into a handful of giant carriers such as Delta and United, which acquired Northwest Airlines and Continental respectively.
The idea of an American-US Airways tie-up has been floated since American went into bankruptcy protection in November 2011.
The carrier has continued to operate under court supervision even as it sought to slash costs by renegotiating wage and benefit deals with its unions.
The prospect of a merger strengthened when union leaders publicly endorsed it in April, and talks moved ahead when the two firms signed a non-disclosure agreement to exchange confidential information in August.