American Airlines, US Airways unveil $11 billion merger
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 percent 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 CEO Tom Horton told Reuters.
The airline, which will carry the American Airlines name, will be 2 percent 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 U.S. Bankruptcy Court, could help speed up the recovery of the U.S. airline industry as carriers will have more room to boost fares as yet another competitor is eliminated.
"Wall street has been enamored of consolidation from an industry perspective because it will help control capacity," said George Hamlin, president of Hamlin Transportation Consulting. "But I'm not sure being large for its own sake is going to guarantee success. A lot of pieces need to be put together. A lot of pieces will need to be shed."
The new American will be based in
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