US Airways Shareholders OK Merger with American

us airways american airlines merger amr bankruptcy aviation airports
Matt Rourke/AP
By DAVID KOENIG and SCOTT MAYEROWITZ

NEW YORK and DALLAS -- US Airways and American Airlines moved closer to creating the world's biggest airline Friday, as US Airways shareholders overwhelmingly approved their proposed merger.

Shareholders of US Airways Group (LCC) would get 28 percent of the shares in the combined company, with the rest going to creditors, employees and shareholders of American Airlines parent AMR Corp.

US Airways said that 132,273,780 shares were voted in favor of the merger while 257,757 shares were voted against it. Another 256,523 abstained.

The merger is still being reviewed by antitrust regulators at the U.S. Department of Justice. It also needs the approval of American's creditors the judge overseeing the airline's bankruptcy proceedings.

Critics of the merger worry that it will reduce competition and drive up prices. Similar complaints arose around the mergers of Delta Air Lines (DAL) and Northwest in 2008, United Airlines (UAL) and Continental in 2010, and Southwest Airlines (LUV) and AirTran in 2011. Antitrust regulators allowed all those deals to go through.


Those other mergers changed the industry landscape, creating giants that made it harder for US Airways and American to compete, said Doug Parker, CEO of US Airways.

The merger "creates a fourth strong competitor to United, Delta and Southwest," said Parker, who will become CEO of the combined carrier, which will keep the American Airlines name and be based in Texas.

If the American-US Airways deal goes through, those four airlines will control more than 80 percent of the domestic air-travel market.

The Justice Department could seek to have American and US Airways give up some takeoff and landing slots at Reagan National Airport outside Washington, D.C.

Parker predicted that regulators will allow the merger to go through, and said, and doesn't think the airlines should be forced to give up slots at Reagan.

American Airlines and AMR have been operating under bankruptcy protection since November 2011. The merger would take effect when AMR emerges from Chapter 11 as a new company, American Airlines Group Inc.

AMR creditors are voting through July 29 on the reorganization and merger and are widely expected to approve the deal. A federal bankruptcy judge in New York has scheduled an Aug. 15 hearing to consider approving the merger, which Parker predicted would take place by the end of September.

The airlines would operate separately for months, if not a couple of years, as they combine work forces, fleets, computer systems and frequent-flier programs.

About 50 members of the Service Employees International Union protested outside the building where the US Airways meeting was being held, and several spoke during the shareholder event. They demanded better pay and, in some cases, union representation for airport workers.


Increase your money and finance knowledge from home

Asset Allocation

Learn the most important step in structuring an investment portfolio.

View Course »

Managing your Portfolio

Keeping your portfolio and financial life fit!

View Course »

Add a Comment

*0 / 3000 Character Maximum

2 Comments

Filter by:
robert2038

American is a great airline, never liked United, Delta is OK, and US air is also very good. It will be a good merger.

July 12 2013 at 9:05 PM Report abuse rate up rate down Reply
JIM MURPHY

After a trip on American last week, all I can say is the service is horrible, seat upgrades were lousy. The flight attendants(misnomer in their case) made one sweep through the plane and disappeared. This was on a 3 hour flight. I guess they will ruin USAirway quickly. If their union is supporting them, it is to bad. Cancelled my American credit card, and hope I can always find another airline to fly on. Our trip on Delta was great, along with the employees. American will never make it with their current attitude to passengers.

July 12 2013 at 6:49 PM Report abuse rate up rate down Reply