American Airline and US Airways Merger
American Airlines and US Airways Merger: Is it Good for Consumers?
Is the new merger between American and US Airways a good thing for consumers or will it lead to higher ticket prices and less chance for people to travel? The latest merger between US Airways and American Airlines now gives people basically just four companies to choose from for their airline travel. Is this fair or is it creating a monopoly?
The $11 billion dollar deal still has to be approved by American Airlines’ bankruptcy court judge and U.S. antitrust regulators. If approved, US Airways and American Airlines will merge and will be headquartered in Fort Worth, Texas. US Airways CEO, Doug Parker, will run the new company that will have nine hubs, 1500 planes, 100 million frequent fliers and $40 billion in annual revenue.
This is the second time Parker has attempted to merge his airline with another. His first attempt in 2006 between his company, US Airways, and Delta Airlines failed because he didn’t have the labor unions and creditors onboard so “this time around “Parker won his merger in large part by giving something to everyone” (CharlotteObserver.com). “To the American Airlines’ unions, he offered the chance to avoid massive layoffs and pay cuts. To his own unions, he offered raises and unified contracts after years without them. To American Airlines’ creditors, he offered a plan that gave them full repayment and 72 percent ownership of the new company. To his shareholders, Parker offered 28 percent of
Pierce #2
a new, $11 billion airline with an international route network US Airways couldn’t create on its own. And for hub cities and travelers, he said the merged airline won’t significantly cut service” (CharlotteObserver). It remains to be seen whether this merger, like so many of the other ones made in recent years, will pull the airline industry out of bankruptcy. Airlines used to be highly profitable. The Civil Aeronautics Board (CAB) set fares on
Is the new merger between American and US Airways a good thing for consumers or will it lead to higher ticket prices and less chance for people to travel? The latest merger between US Airways and American Airlines now gives people basically just four companies to choose from for their airline travel. Is this fair or is it creating a monopoly?
The $11 billion dollar deal still has to be approved by American Airlines’ bankruptcy court judge and U.S. antitrust regulators. If approved, US Airways and American Airlines will merge and will be headquartered in Fort Worth, Texas. US Airways CEO, Doug Parker, will run the new company that will have nine hubs, 1500 planes, 100 million frequent fliers and $40 billion in annual revenue.
This is the second time Parker has attempted to merge his airline with another. His first attempt in 2006 between his company, US Airways, and Delta Airlines failed because he didn’t have the labor unions and creditors onboard so “this time around “Parker won his merger in large part by giving something to everyone” (CharlotteObserver.com). “To the American Airlines’ unions, he offered the chance to avoid massive layoffs and pay cuts. To his own unions, he offered raises and unified contracts after years without them. To American Airlines’ creditors, he offered a plan that gave them full repayment and 72 percent ownership of the new company. To his shareholders, Parker offered 28 percent of
Pierce #2
a new, $11 billion airline with an international route network US Airways couldn’t create on its own. And for hub cities and travelers, he said the merged airline won’t significantly cut service” (CharlotteObserver). It remains to be seen whether this merger, like so many of the other ones made in recent years, will pull the airline industry out of bankruptcy. Airlines used to be highly profitable. The Civil Aeronautics Board (CAB) set fares on
Bibliography: "Business." New American Airlines CEO-to-be Says Charlotte Hub Safe. N.p., n.d. Web. 08 Mar. 2013. This article talks about the merger between US Airways and American Airlines and how the merger will affect many of the hubs throughout the US. It also discusses the merger and who benefits and who loses when it is all over. Spiller, Pablo T., and The Opinions Expressed in This Commentary Are Solely Those of Pablo T. Spiller. "Why American-US Airways Deal Is Good." CNN. Cable News Network, 18 Feb. 2013. Web. 08 Mar. 2013. Discusses how the latest merger will affect prices and consumer choices. Was deregulation a mistake? "The US Airways/American Merger Will Mean Fewer Flights, Higher Prices, and Worse Service. But That 's OK." Slate Magazine. N.p., n.d. Web. 08 Mar. 2013. This article talks about how the major mergers of the different airlines have guaranteed higher prices for travelers. It covers the newest merger between US Airways and American Airlines.