American Airlines + US Airways Merger

[Pupik]

This deal, if it's approved by shareholders, will make for the nation's world's largest airline.

http://dealbook.nytimes.com/2013/02/13/american-and-us-airways-said-to-vote-for-merger/
http://www.foxnews.com/us/2013/02/1...portedly-agree-to-merge-create-world-biggest/
http://www.usatoday.com/story/travel/flights/2013/02/13/american-usairways-merge/1916961/

Ending a yearlong courtship by US Airways, American Airlines agreed to merge with the smaller carrier, paving the way for the creation of the nation’s largest airline.

The boards of the companies have unanimously approved the deal, valued at $11 billion, according to a news release on Thursday morning. A merger would bolster American’s domestic footprint, strengthen its presence in the Northeast and give it a bigger network to attract business travelers and corporate accounts.

Under the terms of the deal, US Airways shareholders would own 28 percent of the combined airline, while American Airlines shareholders, creditors, labor unions and employees would own 72 percent.

The merger would create a company with the size and breadth to compete against United Airlines and Delta Air Lines, which have grown through mergers of their own in recent years and are currently the biggest domestic carriers. The combined airline will have more than 100 million frequent fliers.

But while United and Delta went through bankruptcies and mergers in the last decade, American has been steadily losing ground while racking up losses that have totaled more than $12 billion since 2001. It was the last major airline to seek court protection to reorganize its business, filing for bankruptcy in November 2011.

Personally, I think it's perfect, because you have two airlines that don't seem to care much for their passengers; like the United/Continental merger, you have the "smaller brand" with less name-recognition doing a better job keeping customers reasonably happy and staying profitable.

I think a lot of the worries that ticket prices will suddenly jump is a little unfounded, so as long as there's still four major players (Southwest, Delta, United, USAir/American) in the US market, and a few more (Jetblue, Virgin America, Frontier, Alaska) either emerging and/or expanding across the country.

Admittedly, "US American Airways" sounds rather cumbersome, and with American Airlines changing their logo to "American"...who knows what the branding will be like.

 

[Johnnypenso]

Worlds' largest airline actually...

 

[Pupik]

Worlds' largest airline actually...

Yeah, I saw that and read that (some saying world's or nation's). Cabotage rules pretty much make that so...for now.

 

[Keef]

The only problem with the merger is that the new logo is written in Helvetica.

 

[Omnis]

Do the AAA and the AAC and the UAC all become the Merger Arenas?

 

[sumbrownkid]

They actually started broadcasting commercials showing the new American Airlines look and paint schemes. I like it, I just hope ticket prices don't get to fancy for my tastes.

 

[Crash]

I had completely forgotten about this thread.

My guess is they are going to adopt one of the predecessor company names and call it that, in much the same way that after United and Continental merged, it's now just United. American Airlines seems to have a greater brand value, so I'll say they use that.

In the end though, I'm not sure this merger will really change things all that much. My experience on large American carriers have mostly been terrible. Terrible service, terrible seats, worn-feeling planes. Hopefully, a merger will allow them to be more profitable and be able to rectify some of those problems.

Also, I really dislike the new American livery. It's too garish and cheesy, especially compared to the old one that I think is a lot classier, but this is besides the merger itself.

 

[sumbrownkid]

They had to change the colors anyway and start anew. As much as I liked the steel shine look of the old-school AA, the new one will probably grow on me.

That said, SouthWest will still see regular business from me.👍