FORT WORTH, Texas
(AP) -- American Airlines emerged from bankruptcy protection and US
Airways culminated its long pursuit of a merger partner as the two
completed their deal Monday to create the world's biggest airline.
the latest in a series of mergers that will leave four airlines
controlling more than 80 percent of the U.S. air-travel market. With
less competition, the airlines have successfully limited the number of
seats, boosting prices and returning to profitability.
old parent, AMR Corp., is gone, replaced by the new American Airlines
Group Inc. CEO Doug Parker remotely rang the opening bell of the Nasdaq
Stock Market, flanked on stage by executives and labor leaders of both
airlines and in front of a crowd of cheering employees.
goal here is to go and restore American Airlines to its position as the
greatest airline in the world," Parker said. The largest airline as
recently as 2008, American struggled through a decade of huge losses and
fell behind United and Delta in size.
passengers, the merger won't mean many immediate changes. Whether the
deal leads to higher ticket prices, the issue at the heart of legal
challenges from the government and consumer groups, remains to be seen.
said that merger won't lead to higher airfares because the new American
plans to keep all the service currently offered by American and US
"Airline prices are like prices in
other businesses - they track with supply and demand, and we're not
reducing any of the supply," he said in an interview with The Associated
Elite members of the two
frequent-flier programs will get reciprocal benefits in early January,
with other changes being phased in, executives said. The airlines expect
to soon be able to book passengers on each other's flights, increasing
the destinations available to customers of both.
will take about two years to combine American's fleet and workforce
with those of US Airways, Parker said. US Airways will join Continental,
Northwest and other airlines that now exist only in the memories of
employees and longtime travelers.
mergers are notoriously troublesome. United has been plagued by
computer-network problems since combining with Continental, leading to
outages and flight delays. Airlines' technology systems handle
everything from passenger information to weight and balance calculations
on every flight. Then there is the difficulty in merging two sets of
employees who, in this case, are represented by different unions.
the two flight-attendant unions are fighting with each other -
reminiscent of the continuing, eight-year battle between pilots for US
Airways and America West. The union that represents mechanics at US
Airways boycotted Monday's event because their contract talks have been
stalled for nearly three years.
American received Parker like a conquering hero. Their support for a
merger led by US Airways executives was a turning point when AMR CEO Tom
Horton still hoped to keep his airline independent. For their efforts,
the unions won stock in the new company.
who will serve briefly as chairman before departing, will get severance
of about $17 million in cash and stock, the new company said in a
regulatory filing Monday. The merger agreement called for a $20 million
severance payment, but a judge wouldn't allow AMR to pay it while in
Longtime American CEO Robert
Crandall flew in from Florida for the occasion and predicted that Parker
would "recreate a great airline." Crandall said American fell from
grace by waiting too long to file for bankruptcy and because his
successor angered workers in 2003 with a secret deal on executive
bonuses while regular workers were taking pay and benefit cuts.
Monday, Parker made symbolic moves to extend a hand to labor - painting
over parking spaces once reserved for executives, and asking Nasdaq to
inscribe a commemorative opening bell to the employees instead of to
him. Still, the honeymoon could be a short one.
greatest challenge is keeping positive sentiment on his side," said
Vicki Bryan, an analyst with bond-research firm Gimme Credit. "He's at
the peak of `happy' right now. He's got to keep the unions happy; he's
got to keep the computers running; he's got to keep the balloon in the
Both American and US Airways have rated
poorly in surveys of airline service, a theme sounded by some passengers
interviewed at DFW Airport.
use improvement on courtesy, service and condition of their aircraft -
they have some really old planes," said one flier, Frankie Marrow, a
singer from Los Angeles. She wasn't sure that US Airways is the partner
to help American get better on those scores either, adding, "I've never
been impressed with US Airways."
In their first day of trading, shares of American Airlines Group rose 65 cents, or 2.7 percent, to close at $24.60.
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