NBC 5 News
The boards of American Airlines and US Airways both on Wednesday approved a merger deal, NBC 5 has learned. Sources tell NBC 5 that a formal announcement is not expected until Thursday.
The boards of American Airlines and US Airways both on Wednesday approved a merger deal, NBC 5 has learned.
Sources tell NBC 5 that a formal announcement is not expected until Thursday.
Under the widely reported merger scenario that has been described to NBC 5, US Airways CEO Doug Parker would run the combined airline. American CEO Tom Horton would be named non-executive chairman for a period of one or two years.
The new airline would keep its headquarters in Fort Worth. The company would also keep the American brand, with the US Airways name to go away.
The Wall Street Journal first reported that both boards had voted on Wednesday to approve the merger.
The deal has been in the works since August, when creditors forced American to consider a merger rather than remain independent. American has been restructuring under bankruptcy protection since late 2011.
Together, American and US Airways will be slightly bigger than United Airlines. Travelers won't notice immediate changes. It will likely be months before the frequent-flier programs are merged, and possibly years before the two airlines are fully combined.
If the deal is approved by American's bankruptcy judge and antitrust regulators, the new American will have more than 900 planes, 3,200 daily flights and about 95,000 employees, not counting regional affiliates. It will expand American's current reach on the East Coast and overseas.
"If this is a takeover, it is one of the softest takeovers I've seen," said Rick Seaney with Dallas-based Farecompare.com. "Stays in Dallas, stays with advantage program One World, 70/30 deal, losing top management it looks like, but I'd say it's a pretty passive, aggressive takeover."
The merger is a stunning achievement for Parker, who will run the new company. Parker's airline is only half the size of American and is less familiar around the world, but he prevailed by driving a wedge between American's management and its union workers and by convincing American's creditors that a merger made business sense.
"In the short-term, this deal is going to take about two years to happen, so we've seen airlines raise prices, attempt to at least three or four weeks, that's going to continue regardless of this merger," Seaney said. "Long-term prices will be higher, it'll be tempered by the economy and how much we can afford to pay for tickets right now. That's what's holding prices down at the moment."
Travelers at Dallas/Fort Worth International Airport said Wednesday that they were not surprised to hear about the merger.
"I think it’s good," Ethan McClusky said. "I think it betters the airline, and they said pilots are going to get better raises, so I think it's better overall."
Mark Boeller, who always flies American, said he thinks the merger will be great.
"It will give us access to the East Coast," he said. "American's going to continue being a primary player. I think it'll be awesome."
But Chris Desjardins said his experience with US Airways has not been good and said he doesn't think the merger will help American.
"When I use to fly up and down the East Coast, I would fly US Airways," he said. “All I can think of is, everything about American is going downhill; their customer service."
Just five years ago, American was the world's biggest airline. It boasted a history reaching back 80 years to the beginning of air travel. It had popularized the frequent-flier program and developed the modern system of pricing airline tickets to match demand.
But years of heavy losses drove American and parent AMR Corp. into bankruptcy protection in late 2011. The company blamed bloated labor costs; its unions accused executives of mismanagement.
NBC 5's Scott Gordon, Ray Villeda and Brian Curtis contributed to this report.