62°
Cloudy
SAT
 74°
 57°
SUN
 76°
 55°
MON
 78°
 53°
TUE
 79°
 57°
WED
 76°
 57°

American, US Airways announce $11 billion merger

  • A U.S. Airways jet passes an American Airlines jet, Thursday, Feb. 14, 2013 at Sky Harbor International Airport in Phoenix. The merger of the two airlines has given birth to a mega airline with more passengers than any other in the world. (AP Photo/Matt York)

DALLAS — US Airways CEO Doug Parker has landed the big merger he sought for years. Now the soon-to-be CEO of the new American Airlines has to make it work.

The new airline needs to repaint hundreds of planes. Frequent flier programs have to be combined. American's on-time performance must improve. And the airline needs to win back business travelers who have drifted to competitors. But Parker's nothing if not persistent.

After months of courting, the companies on Thursday announced an $11 billion merger that will turn American into the world's biggest airline, with 6,700 daily flights and annual revenue of roughly $40 billion. It's a coup for Parker, who runs the much-smaller US Airways Group Inc. and believes that mergers help airlines achieve higher revenue and consistent profits.

When the deal closes later this year, the four biggest U.S. airlines — American, United, Delta and Southwest — will all be the products of mergers that began in 2008. Those deals have helped the industry control seats, push fares higher and return to profitability. But it's not easy to stitch two airlines together.

Some of Parker's work has already been done. American parent AMR Corp. has cut costs and debt since it filed for bankruptcy protection in late 2011. Pilots from both airlines have agreed on steps that should make it easier to combine their groups under a single labor contract, a big hurdle in many airline mergers. But when the deal closes — expected by September as part of AMR's plan to emerge from bankruptcy protection — there will still plenty to do.


© The Press Democrat |  Terms of Service |  Privacy Policy |  Jobs With Us |  RSS |  Advertising |  Sonoma Media Investments |  Place an Ad
Switch to our Mobile View