US merger creates world’s biggest airline

United States based airlines American Airlines and US Airways have announced today that they have merged to create the world’s biggest airline.

The $11bn deal, which was agreed last night and revealed this morning, will operate under the American Airlines name but under the stewardship of Doug Parker, the CEO of US Airways. Tom Horton, the CEO of American Airlines, is expected to serve as chairman of the new company until mid 2014.

A possible deal was first considered last August, when American began looking at a suitable merger while under pressure from its creditors. The company has been reorganising since late 2011 and has been under bankruptcy protection. Under the new deal it is believed that American Airlines creditors will own 72 percent of the company, and the shareholders of US Airways Inc will own the balance.

Assuming that the deal gains the necessary approval from the US bankruptcy courts, passengers on the two airlines are not expected to notice any difference to the relative services in the near future. However, the new entity will wield considerable resources in the US and world aviation markets, with combined hubs in Charlotte, Philadelphia, Phoenix, Dallas-Fort Worth, Chicago, Miami, New York and Los Angeles. Between them, the two companies can muster a total of 900 airplanes that can operate 3,200 daily flights, and will employ 95,000 staff. The complete integration of the two giant companies is expected to take years.

Four US airlines, American, United, Delta and Southwest, control almost 75 percent of all US air travel.