Green light for World's Biggest Airline

Feb 15, 2013

The boards of American Airlines owner AMR Corp and US Airways Group have approved a merger that would value the combined company at around $US11 billion ($10.5 billion), people familiar with the matter say.

The deal, which will be announced early on Thursday, comes more than 14 months after the bankrupt parent of American Airlines filed for bankruptcy in November 2011, and would mark the last combination of legacy US carriers, following the Delta-Northwest and United-Continental mergers.

The board approval came after AMR's unsecured creditors committee, which includes all three of AMR's major unions, met earlier in the day to approve a proposed merger agreement, the people said. The all-stock merger would give AMR creditors 72 per cent of ownership in the merged entity and US Airways shareholders the rest, the people said.

The merged company will have a board of 12 members: four from US Airways including its chief executive Doug Parker, three from AMR including chief executive Tom Horton and five to be designated by the AMR creditors, one of the people said.That will shrink to 11 members in 2014 after Horton steps down following the combined company's first annual meeting, the person added. Parker becomes chief executive of the new airline. AMR's unsecured creditors are expected to be made whole on their claims in the form of stock in the merged company and also get accrued interest, the people said. AMR's shareholders will get a small equity stake as well, they added.
 
All the sources asked not to be named because the matter was not public. US Airways declined to comment while AMR representatives could not be immediately reached for comment.
A tie-up with US Airways would create the world's top airline by passenger traffic and help American and US Air better compete with United Continental Holdings and Delta Air Lines.
Some $US11 billion valuation of the combined American-US Airways compares to the roughly $US12.4 billion market capitalisation for Delta, and $8.7 billion for United Continental.
 
The News was originally published in- The Age

By Andre Rasquinha

comments powered by Disqus
Newsletter
"Subscribe to news letter, get special deals"

THE BENELUX BONANZA

My memories of Luxembourg and Belgium will forever remain etched in memory as two jewels in the crown of  any travel odyssey I have undertaken...........
 

Read More..

The journey I was about to undertake would not only  in geographical terms span vast distances over land and sea......it was an odyssey which would cover a period of over four hundred years and one in which I would try to establish a "connection" with my ancestors.


Read More..

We really enjoyed our tour and we will have no hesitation whatsoever in organizing all our future holidays through you.

S Williams, Melbourne

Give Feedback