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American Airlines and US Airways merger nearing completion

On Behalf of | Nov 19, 2013 | Business Formation And Planning |

Though American Airlines based out of Fort Worth and US Airways have sought to merge, the decision was largely dependent upon actions taken by the U.S. Department of Justice.  It now appears that the DOJ will let this merger go forward, but the two airlines also had to make a number of compromises for this to occur.  For example, the new airline would have to give up a number of slots at some of America’s largest airports.

Despite what has gone on in the negotiations, the new merger is expected to create the world’s largest airline.  The two airlines hope that the merger will be completed by December in the creation of the new American Airlines.  The new airline hopes to bring in as much as $1 billion in 2015.  

Accomplishing the merger has not been easy and still requires the approval of a federal judge. The government sued the airline on behalf of a number of states including Texas to block the merger. There were concerns that the merger would restrict competition and possibly drive up costs for consumers.

However, the two companies made their case that this merger would make the airways even more competitive due to United Airlines And Delta Air Lines already controlling so much of the air traffic. The Texas Attorney General Greg Abbot has now changed his mind and appears to be supportive of this venture. This may have come about due to executives of the new airlines meeting with this official.

In light of all the money at stake and all the efforts of the two airlines, it is vital that such dealings are conducted in an efficient and professional manner. Experienced business formation attorneys can provide key planning for whenever a business is proposed. While most business ventures or mergers are not going to involve billions of dollars being at stake, it still can involve the life savings and professional livelihood of a large number of individuals. These ventures can also provide employment opportunities for those living in the community as well.

Source: NBCDFW, “American Airlines, US Airways Agree to Antitrust Settlement With Department of Justice,” Frank Heinz, Nov. 13, 2013