Airline Merger Moves Closer To Takeoff
FORT WORTH (CBSDFW.COM) - After nearly two years, American Airlines has just been cleared for takeoff from bankruptcy, and can now merge with US Airways. Bankruptcy court Judge Sean Lane in New York gave his official approval at a hearing on Wednesday morning.
The new American Airlines will close the $14 billion deal on Monday, December 9. The newly combined airline will still be based in Fort Worth. On the stock market, AAL will replace AMR.
While the airlines will close the deal in December, officials have said that they hope for a formal launch on January 7.
For now, both airlines will still operate as two separate carriers. So, if you have tickets on US Airways, that will continue. And the same goes with American Airlines. Officials have said that it will take up to two years to combine both airlines into one.
On December 9, American Airlines will have a new CEO: Douglas Parker, the current CEO of US Airways. Tom Horton, current CEO of American Airlines, will become Chairman of the Board of Directors for about one year. Then, Parker will become the board chairman as well.
During the early Wednesday hearing, Judge Lane rejected a last minute request by a group of 40 travel agents and business travelers to temporarily block the merger, saying that it violated federal antitrust laws. Judge Lane stated that there was no evidence submitted on how the plaintiffs would be hurt by the merger.
Critics have stated that the merger will increase airfares and reduce the number of flights and competition. But both American Airlines and US Airways have argued that the merger will boost competition because they would be able to go toe-to-toe against United Airlines and Delta Air Lines, which were allowed to merge previously.
Judge Lane's approval comes weeks after both airlines settled an antitrust lawsuit brought by the Department of Justice. As part of the settlement, the new airline will give up some coveted takeoffs and landings at LaGuardia Airport in New York City and Reagan National Airport in Washington, D.C.
The combined airline will also have to sell its two gates at Dallas Love Field and other airports including Boston Logan, Chicago O'Hare, Miami International and LAX.
Tens of thousands of employees at both American Airlines and US Airways welcome the merger.
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