Carriers American Airlines and US Airways to merge

Feb 14, 2013

US giant facing bankruptcy will join with US Airways to create world's biggest airline

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AMERICAN AIRLINES and US Airways will today announce they are merging to form the world's biggest airline. The new airline will fly under the American Airlines brand, but the chief executive is tipped to be the current US Airways boss, Doug Parker.

The majority of the new $11bn (£7bn) company – 72 per cent – will be owned by American Airlines creditors, after the carrier business filed for bankruptcy in November 2011.

The boards of the two carriers are believed to have met on Wednesday to approve the deal, but neither business has commented publicly yet, reports the BBC. The Wall Street Journal believes the merger is a "triumph" for Parker who has been trying to merge his midsize company, US Airways, with a larger carrier for years.

Both Parker and American Airlines chief executive Tom Horton began their careers in the mid-1980s in the company's finance department, and are old friends and rivals.

Horton had previously resisted the merger, saying in an interview: "Contemplating a merger in the middle of a complex restructuring is like running a marathon with a backpack on. You just wouldn't do it."

Reuters reports Horton is now expected to serve in the new company as the board's non-executive chairman before stepping down in 2014. Five of the new business's board members will be chosen by American Airlines creditors.

The merged airline will employ around 100,000 people and have around 900 aircraft running more than 3,000 flights. Following a turbulent period of bankruptcies and consolidation, the US airline industry will now be dominated by four players: American, United, Delta and Southwest.

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