The big news of the past week in the travel field was the proposed merger of the AMR, the parent of American Airlines and the US Airways. The merger gives the creditors of the AMR 72% and the US Airways shareholders 28% of the equity of the merged airline.
You can read more about the effect of this merger on AA’s website newamericanarriving.com.
There has been a very wide coverage of this merger in the financial TV (Bloomberg & CNBC) and on the press. I saw the CEO’s of both the airlines being interviewed on the Bloomberg after the announcement. It was clear that the future chairman of the combined airline, Mr. Parker, was in the leading role.
Originally the CEO of American Airlines, Mr.Tom Horton, had tried to keep the airline independent, but failed. The CEO of US Airways reached the employees of American Airlines directly and made a deal with them. He also negotiated with the American’s creditors. At the end, there was likely no other option than to get the board to vote about the issue and they voted yes.
There is a very good compilation of articles on the WSJ.com about this merger including a nice timeline of the airline mergers in the recent past. Some of these WSJ.com articles might be behind a pay wall, but you can always use Google News to access them.
It is interesting to see, how this merger is going to play out. The CEO of US Airways is a tough negotiator. He was able to get his America West to merge with much larger US Airways and now he is trying to do the same with American Airlines.
The current US Airways still operates internally as two separate airlines; US Airways West (the former America West) and the US Airways East. Routes are operated with either of these two entities and the crews cannot mix and match. Not sure how bringing a third airline to the picture is going to resolve everything?
As an Executive Platinum members (unlikely to qualify this year) and lifetime Platinum member (almost two million miles), I truly hope that this merger is going to work out.