Corporate Law Blog

New company formed after merger now the world's biggest airline

Though American Airlines had previously sought bankruptcy protection, it has now merged with US Airways to become the world's largest airline.  American Airlines former parent company, AMR Group, has now been replaced by American Airlines Group Inc.  This all follows a number of years where the company suffered from financial losses.

There have been concerns that such a merger would lead to higher ticket prices for passengers.  This concern comes in part because now four airlines are said to control 80 percent of the commercial air travel in the United States.  The company had to fight off legal challenges from the government and consumer groups.  In the meantime, the CEO for the new parent company has assured the public that this merger will not leading to higher ticket prices.

Certain changes concerning the way the new company will be phased in.  It may take as long as two years for the workforce to combine - all of which will likely involve a great deal of planning.

It has been noted that airline mergers have never been easy.  Coordinating technology and the workforce is a complicated process.  It's for this reason that the services of experienced business transactional attorneys are needed through the entire process.  This includes both strategic planning on the front end and continually assisting in the merger until the matter is finalized. 

It is noteworthy that unions at American Airlines have been extremely supportive of the merger.  Union members likely understand that mergers such as this one may in some circumstances be the best means of keeping the airline solvent.

Source: Kentucky.com, "New American Airlines emerges as deal closes," David Koenig, Dec. 9, 2013