American Airlines and US Airways Merge to Become World's Largest Airline
JEFFREY BROWN: Two major airlines announced a marriage of sorts on this Valentine's Day. Their combination means the field of major U.S. carriers will shrink by one.
These jetliners sporting shiny new paint jobs are among the roughly 900 planes in the American Airlines fleet, and they're about to be joined by the 622 planes currently flying for U.S. Airways. The price tag for the deal, $11 billion dollars. Creditors of American's bankrupt parent company, AMR, will own 72 percent of the combined airline.
The merger affects some 187 million passengers who fly the two airlines annually.
TOMMY WHITE, Passenger: I grew up on U.S. Air. And that's been sort of our cornerstone carrier for most of our lives growing up. So, it's kind of sad to see them losing their name and moving to American Airlines. But that's the way the world works, and they need to stay competitive. And if this is the way they can do it, then, I guess, as a consumer, you have got to support that.
JEFFREY BROWN: The new company will employ more than 100,000 people.
CHRIS MANNO, Pilot, American Airlines: Our best goal going forward is to make it the biggest, strongest airline in the country, and I suppose that's about to happen.
JEFFREY BROWN: The combined company will keep the American name and headquarters in Fort Worth, Texas. But it's U.S. Airways CEO Doug Parker who will run it. His counterpart, Tom Horton at American, will serve as chairman, but bow out after the transition. The two are friends who started their careers together at American three decades ago.
DOUGLAS PARKER, U.S. Airways: And to run a new airline, you need to have one leader and only one leader that the rest of the airline sees. And Tom was nice enough to agree to hang around and help me with that transition, but then also cared enough about American to know that once that transition happens, the company needs to see one leader, and was confident enough in me to let me do that, which I'm elated to do.
THOMAS HORTON, American Airlines: And don't mess it up.
DOUGLAS PARKER: I'll try not to.
JEFFREY BROWN: American Airlines, founded in 1930, has always touted itself as a company of firsts.
NARRATOR: American had already put stewardesses on their planes, and food, even radios. And their firsts soon became a tradition in the business, from the first sleeper planes to the first fan-jets, to the first living-room-size coach lounge.
JEFFREY BROWN: Now the new American stands to become the world's largest carrier, if federal regulators and AMR's bankruptcy judge approve the deal.
As little as five years ago, there were six major U.S. carriers. Then, Delta merged with Northwest and United with Continental. With this latest deal, there will be four major U.S. airlines left, including Southwest. But for many air travelers today, one question was uppermost. Does this merger mean fares will go up?
The CEO of the combined new company says no.
DOUGLAS PARKER: This really is about taking two airlines and putting them together and providing better service to customers. It also, I would note, takes -- creates a nice third competitor to the two larger airlines, so our view is it increases competition.
JEFFREY BROWN: The timeline has the merger closing in the third quarter of the year, but it will take several years before the two airlines are fully integrated.