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Merger creates world's largest airline

The world’s largest airline has been created by a merger of American Airlines and US Airways.

The new entity – which will have a market value of about $US11 billion – will retain the American Airlines brand, aircraft paint design and headquarters in Fort Worth, Texas. It will be called American Airlines Group.

Surprisingly, only 12 of the airlines’ combined 900 routes overlap and all of those are domestic. Of the 336 destinations the pair serve, there are 62 US Airways cities not served by American, and 130 American cities not served by US Airways.

Internationally, US Airways' offering to Europe will nearly double the merged airline's destinations there.

The transaction will enable AMR to emerge from bankruptcy-court protection through  a stock-swap.

AMR creditors will receive 72% of the new company and existing shareholders are in line to receive at least a 3.5% aggregate stake. US Airways shareholders will hold a 28% stake.

US Airways will leave the Star Alliance and join American in its Oneworld alliance.

The addition of US Airways in Oneworld will strengthen its share of premium passenger bookings to 34% from 26% today, making Oneworld, Star and the third grouping, SkyTeam more similar in size, Mr. Parker said.

The transaction requires approval by the bankruptcy judge overseeing AMR's restructuring and antitrust clearance from the U.S. Department of Justice and other regulators.

The new American would vault over United Continental and Delta Air Lines in traffic size.

The merged company plans to take delivery of 600 new jets and will retain their in-house commuter-airline units.

It will also continue to maintain all eight domestic hubs and operate 6700 daily flights to 336 destinations in 56 countries.

More by Nevil Gibson

Comments and questions

in 20 years time carriers will be owned by countries , and run by private entities
USA,Europe and Asia/middle east will be the key three hubs


Becasue as oil, food and commodoties get scarcer - countries will step in and negotiate between each other as it will be too important for private ownership to have that much control.