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Bankruptcy Court Blesses American/US Airways Deal


U.S. Bankruptcy Court approval of American Airlines’ settlement with the U.S. Department of Justice clears the final hurdle for a $17.2 billion deal creating this planet’s largest airline. The merger is set to go into effect December 9. That’s when the name of the company officially becomes American Airlines Group Inc.

The court’s approval was not unexpected. The big breakthrough on the contentious merger of American and US Airways came November 12 when the carriers agreed to relinquish competitively important takeoff and landing slots at key airports such as Reagan Washington National and New York LaGuardia. As a result, DOJ dropped its opposition to the merger.

By any measurement, that merger is mammoth. American fields more than 3,500 daily flights to 260 airports in some 50 countries. US Airways operates some 3,100 flights each day to 198 cities.

American is one of the original US carriers. Over the years it grew by taking under its wing airlines such as Air California and Reno Air. US Airways is perhaps the U.S. airline industry’s prime example of merger. Starting out as Allegheny Airlines, the carrier changed its name to USAir with the onset of airline deregulation. From that point on, it was off to the races, as it acquired West Coast-based Pacific Southwest Airlines and East Coast-based Piedmont. Phoenix-based America West entered into the equation in 2005, when it bought by then-bankrupt US Airways and took its name.

The new US Airways’ biggest coup is landing American Airlines. It gets the carrier’s iconic name, while inserting key players from its management team to help run the world’s largest airline. Five of the top eight executives are US Airways people, three are American. US Airways Group CEO Doug Parker becomes CEO of American Airlines Group, and US Airways President Scott Kirby assumes the title of AAG president.

Now the really interesting part begins, the part that impacts air travelers not just in the United States but the world over. Everything else has been prelude. How well the two carriers integrate is critical to the success of all this, specifically how they integrate their two cultures. Just how much the public benefits is much dependent on the mechanics of this ambitious meshing.


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