Thread: American Airlines, US Airways to form largest air carrier Monday By Gregory Wallace

American Airlines, US Airways to form largest air carrier Monday

By Gregory Wallace @gregorywallace December 8, 2013: 3:05 PM ET


Airline mega-merger will have bumps

NEW YORK (CNNMoney)
A deal to form the world's largest airline is set to be inked Monday.

The merger of American Airlines and US Airways is expected to form an air travel giant larger than the current industry leader, United Continental Holdings (UAL, Fortune 500).

The deal cleared a series of legal hurdles, including anantitrust lawsuit this fall from the Justice Department and a last-minute challenge from a consumer group.

The airlines and Justice Department settled the antitrust suit last month, and the Supreme Courtdeclined late Saturday to take up the challenge that the merger will lead to higher airfare and fewer choices for passengers.

Related: American, US Air cleared to land merger

American Airlines and US Airways (LCC, Fortune 500) are expected to sign the merger documents before markets open on Monday.

The new company will be called American Airlines and trade on the Nasdaq under the symbol AAL.

Passengers likely will not see effects of the merger immediately. They will continue to book flights under the American Airlines and US Airways brands.
Ticketing and frequent flier programs are expected to be combined -- at the earliest -- in 2014.

Related: What the settlement means for fares

To secure the deal, the Justice Department required the airlines to give up some access at two major airports. The Justice Department said this would give opportunities to low-fare airlines.

Both Southwest (LUV, Fortune 500) and JetBlue (JBLU, Fortune 500) are expected to expand flights at New York's LaGuardia and Washington, D.C.'s Reagan National airports. Southwest has already said it plans to add six round-trip flights between LaGuardia and yet-to-be-announced airports.

A 2012 study by PricewaterhouseCoopers found airfares "have not increased significantly" since 2004. Since then, a series of mergers produced the landscape of major carriers that exists today.

Related: The runway to the final four

The airlines argued the merger would provide customers more options.
American parent AMR (AAMRQ, Fortune 500) filed for bankruptcy in 2011 but in Julyreported a record monthly profit.

http://money.cnn.com/2013/12/08/news...html?hpt=hp_t2

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