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American Airlines, US Airway to create world's biggest airline

by Staff Reporter
15 Feb 2013 at 06:23hrs | 2458 Views
BEIJING - American Airlines and US Airways have announced plans of a merger. The 11-billion-dollar deal will form the world's biggest carrier.

The creation of an airline giant. The new combined carrier will be called American Airlines.

It will be based in Fort Worth, Texas and run by Doug Parker, CEO of the US Airways Group.

American Airlines CEO, Thomas Horton, announced the deal in Dallas, Texas.

Thomas Horton, American Airlines CEO, said, "Through the merger of American and US Airways we are creating a premier global carrier. And by combining the strengths of both companies we will be delivering the most value to our owners and the greatest benefits to our customers and our people."

The new airline expects to generate 40 billion US dollars in annual revenue and offer more than 6,700 daily flights to 336 destinations in 56 countries.

It's anticipated that the merger will result in 1 billion dollars in combined benefits and enable cost savings of roughly 150 million.

The merger means American, United, Delta and Southwest will control about three-quarters of US airline traffic.

Some people are concerned about that concentration.

Scott Mayerowitz, Airlines Writer, Associated Press, said, "Having just four major airlines in the US is probably going to lead to some fare increases. It's just a matter of supply and demand out there. The airline say not necessarily so because they're going to save a lot of money and will hopefully pass that money on to consumers."

The merger caps a turbulent half-decade of bankruptcies and consolidation for the US airline industry.

The surviving airlines offer bigger route networks that appeal to high-paying business travellers.

This has allowed them to limit the supply of seats, which helps prop up fares and airline profits.

Source - airline
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