US Airways Merger With American Approved By Company Boards

US Airways Merger With American Approved By Company Boards

The merger between AMR and US Airways was approved by the boards of the two companies, according to someone who had knowledge about the discussions.

The American network will benefit from the merger between the two airline companies particularly the East Coast.

The deal will result to the reduction in the number of major airlines in the US from ten in 2001 to four.

The company that will be formed by the merger will join Delta Air Lines, Southwest Airlines, and United Continental as the biggest airlines in the US. Last year, they ferried around 83 percent of all airline passengers in the country.

Despite the reduction in the number of mega-carriers, fares have not increased that much as it has only gone up by around two percent in the last ten years. Ticket prices are not expected to go up soon.

Once the merger between the two airline companies is completed, travel disruptions are expected to increase as the systems of the two companies are merged. The desire of US Airways in acquiring American Airlines was noticeable since the bankruptcy filing of AMR in November 2011. Although the board of American aimed to remain independent, three major unions have endorsed the merger due to contract issues and job cuts.

The management of the company revealed that more pilots have called in sick after it used the bankruptcy court ruling in making contracts less favorable for them. Cancellations and delays increased which resulted to the shifting of some business clients to other airlines.

The merger is expected to make the new company the biggest in passenger traffic. It can be recalled that US Airways acquired another bigger airline company after it filed for bankruptcy. When the airline still called America West, it acquired US Airways in 2005.

It also attempted to takeover Delta when it was bankrupt, however, the larger airline was able to fend off efforts by US Airways.

Posted by Sophia Andrews on Friday February 15 2013, 3:07 AM EST. Ref: CNN. Link. All trademarks acknowledged. Filed under Featured News, Travel. Comments and Trackbacks closed. Follow responses: RSS 2.0