American Airlines, the troubled airline company currently in chapter 11 bankruptcy, is close to announcing a merger with US Airways according to a report published in Forbes.com today, February 7, 2013.
The two airline companies have been discussing a merger for more than a year, but there has been greater intensity in the past two months, with financial reports trading hands and analysts on both sides crunching numbers to determine if the business marriage makes sense.
Financially, the combination of the two brands could be a boon to both businesses and this is likely why the deal is closer to fruition. American Airlines, as stated previously, has been in bankruptcy for some time and the merger could help pull it from its financial lapse. US Airways isn’t presently in bankruptcy, but the merger with American Airlines could also benefit its bottom- line and most outside analysts agree that the merger is a good financial move for all parties involved.
American Airlines has a strong union and they support the merger. However, the union has stated that it does not want American Airlines management running the new business. According to official sources, US Airways CEO Doug Parker will likely lead the new company and American Airlines CEO will be relegated to an honorary position on the board. If this proves to be true in the end, it will satisfy the unions and keep the merger on course.
American Airlines parent AMR, Inc. will remain the headquarters of the new business and will stay in Fort Worth, Texas. The American Airlines name will remain as well, doing away completely with the US Airways brand. American Airlines does plan to reveal a new logo and a new exterior design for its aircraft, but other than that, things will likely remain the same.
US Airways board still has to approve the deal and because American Airlines is presently in bankruptcy protection, a bankruptcy judge would also need to approve, along with the U.S. Department of Justice and the European Union. Thus, the deal is by no means in the books, but it is certainly headed in that direction and could be complete in a matter of weeks.
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