Thursday, February 7, 2013

AA / US Airways merger closer to reality

American Airlines and US Airways are reportedly nearing agreement on a merger, though nothing is finalized and neither company is commenting. No announcement is expected until next week.

The Wall Street Journal reported that, under the deal now being negotiated by top executives from both carriers, American’s creditors would end up owning around 72% of a merged carrier while US Airways’ shareholders would control around 28%. However, the newspaper, citing confidential sources close to the talks, cautioned that the deal could still fall through.

The Dallas Morning News reported that a merger announcement is likely next week with US Airways chairman and CEO Doug Parker becoming CEO of the merged company. American chairman, president and CEO Tom Horton reportedly would serve as non-executive chairman, though perhaps not long-term. The newspaper also cautioned the situation is “fluid” and final details have not been firmly agreed.

Neither of the company’s boards of directors has voted on the merger yet.

Dallas/Fort Worth-based American has been operating under Chapter 11 bankruptcy protection since November 2011. Phoenix-based US Airways is the result of a 2005 merger between America West Airlines and the former US Airways, which itself went through a Chapter 11 reorganization.

(Aaron Karp - ATWOnline News)

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