American Airlines, US Airways boards vote to merge, sources say
FORT WORTH — The deal is finally done.
On Wednesday, the boards of directors for both AMR Corp. and US Airways Group approved a definitive agreement to merge the two carriers, sources close to the deal said.
An announcement is scheduled for Thursday morning at Dallas/Fort Worth airport in the American Airlines' Admirals Club, said the sources, who declined to be identified.
The merger will produce the largest airline in the United States, bumping United Continental out of the top spot, with combined revenues of $38.7 billion and close to 100,000 employees.
The deal will need to be approved by the bankruptcy judge and by federal regulators before AMR, American's parent company, can exit Chapter 11 bankruptcy protection.
AMR's board met in New York and voted unanimously to approve the merger, the sources said. A bankruptcy filing is expected on Thursday regarding the deal.
Details of the merger have not been released. But the sources said that AMR chief executive Tom Horton will become non-executive chairman of the new carrier until its first shareholder meeting, likely in mid-2014. US Airways CEO Doug Parker will become chief executive of the merged airline.
The deal is likely to include a 72 percent equity stake for AMR creditors, while US Airways shareholders will receive 28 percent of the equity in the new company, sources said, adding that AMR common shareholders will get a percentage of AMR's equity portion of the merger.
According to The Wall Street Journal, the board of the new company will have 12 directors, with five appointed by American's creditors, three appointed by American and four appointed by US Airways.
US Airways has been pushing for a merger since last spring, winning the support of American's unions and creditors.
Meetings have been going on for weeks as executives at both companies, along with American's unsecured creditors committee and an ad hoc bondholder group, tried to reach a deal before the Feb. 15 expiration of a nondisclosure agreement with bondholders.
AMR had previously asked the court to extend its deadline until late April to submit a reorganization plan, which suggested that talks could have stretched past this week.
With the merger, American will get more market share on the East Coast, where it has lost business in recent years to carriers like JetBlue. US Airways' hubs in Charlotte and Philadelphia will also bolster American's north-south traffic on the East Coast.
For US Airways, the merger gives it access to more international routes and partners through the Oneworld alliance.
US Airways is a member of the Star Alliance but does not have the full benefits.
where United has better joint ventures with international partners.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Cost-cutting at Kraft Heinz extends to refrigerator
- Home rental prices jumped again in June
- Muni bond funds stressed
- GNC to convert more stores to franchises as sales, profits slip
- Economy’s 2Q best since last year
- U.S. asks Supreme Court to reinstate convictions of portfolio managers who won on appeal
- Facebook ready to test giant drone
- Kennametal expects to consolidate plants as it shrinks manufacturing in continuing streamlining; profit drops
- Stocks bounce back from big losses to close relatively flat
- PPG puts brand 1st in strategy to reach commercial paint market
- Travelers find direct Web route to Priory’s spirited past in North Side