American Airlines, US Airways unveil $11bn merger

A US Airways plane and an American Airlines plane pass each other at Ronald Reagan National Airport in Arlington County, Virginia. AMR Corp and US Airways Group unveiled an $11bn all-stock deal yesterday that gives creditors of the bankrupt American Airlines parent control of the combined airline. US Air’s management team, led by chief executive Doug Parker, will assume operational control of the airline, while AMR creditors will wind up owning 72% of the combined carrier and take five seats on the 12-member board. US Airways will have four seats on the board. The remaining seats will be filled by AMR representatives. “It has been the most successful airline restructuring in history, and we had been very focused from the outset on creating the most value for our owners,” AMR chief executive Tom Horton told Reuters. The airline, which will carry the American Airlines name, will be 2% larger than current No 1 United Continental Holdings Inc in terms of traffic - the number of miles flown by paying passengers worldwide. The merger, subject to approvals from regulators and the US Bankruptcy Court, could help speed up the recovery of the US airline industry as carriers will have more room to boost fares as yet another competitor is eliminated.