American Airlines deal creates largest global airline

American Airlines deal creates largest global airline

American Airlines has emerged from bankruptcy protection and completed its merger with US Airways to create the largest airline in the world.

The merger has already survived a challenge from the government and criticism from consumer groups, but will now face the long task of integrating the two airlines.

There had been fears from those opposed to the deal that it would lead to higher prices due to a reduction in competition on some routes.
Leaders at both airlines have denied this will be the case.

The deal is the latest in a series of mergers that will leave four airlines controlling more than 80 per cent of the US air-travel market and with more power than ever to limit seats and boost profits.

As American emerges from bankruptcy as American Airlines Group Inc., it will mark a monumental victory for chief Doug Parker and his executive team at smaller US Airways, who convinced American’s creditors that a merger made more sense than letting American remain an independent company.

Parker marked the day by ringing the opening bell on the Nasdaq Stock Market, where the new company will debut under the ticker symbol AAL.
Parker’s team will spend the next two years or longer combining the two carriers.

The American Airlines name will live on, while US Airways will join Continental, Northwest and other airlines that now exist only in the memories of employees and long-time travellers.

The new airline expects to generate more than $1 billion in annual cost savings beginning in 2015.

It has big challenges — starting with pulling off a merger of its computer reservation systems that avoids the massive headaches that plagued United Airlines’ reservations after its 2010 merger with Continental.