Judge sets Dec. 9 for official US Airways-American merger
Judge gives final OK for Tempe airline to combine with American
Tempe-based US Airways will officially complete its merger with American Airlines in the second week of December.
The merger between Tempe-based US Airways and American Airlines will officially occur before the stock market opens Dec. 9, following a Bankruptcy Court judge’s decision Wednesday.
“On that day, American will emerge from restructuring, and we will legally close our merger,” the airlines said in a statement. “That will be an important date of celebration for our people.”
The airlines still face significant challenges combining their operations and won’t begin to make those changes until early 2014.
Heading into the Thanksgiving holiday, Judge Sean Lane in New York approved the plan for Fort Worth, Texasbased American parent AMR Corp. to emerge from bankruptcy and combine with USAirways Group Inc. to create the world’s largest airline in terms of passenger traffic. The deal is worth an estimated $17 billion.
Lane’s decision comes after a settlement with the U.S. Justice Department two weeks ago in which the airlines agreed to sell to competitors certain takeoff-and-landing rights and gates in several major cities, including New York, Washington, Los Angeles, Chicago, Boston and Miami.
Lane’s order said the merger “is in the best interest of (American), their economic stakeholders, and all parties of interest” and that “the settlement is fair and reasonable, supported by sound business reasons and judgment.”
The combined airline, to be called American and based in Fort Worth, also agreed in the Justice Department settlement to maintain “historic” service levels at current USAirways and American hubs, including Phoenix Sky Harbor International Airport, for at least three years, and to continue serving some smaller cities, including Tucson, Yuma and Flagstaff, for five years.
The Justice Department challenge came in August and was joined by attorneys general from several states, including Arizona.
Arizona Attorney General Tom Horne said the settlement was important because of fears that the combined airline would eliminate Phoenix as a hub.
Lane said in September that the merger could proceed once the Justice Department challenge had been addressed.
The agreement comes nearly two years after US Airways started pursuing its larger rival, nine months after the merger was proposed and three months after the antitrust lawsuit posed a serious threat to the deal.
Arizona still will lose one of its coveted Fortune 500 company headquarters because the new company, American Airlines Group Inc., will be run from Texas. Officials have said they intend to maintain a presence in Tempe, where 750 people now work at the US Airways headquarters, although it’s likely the combined operation will create redundant positions that would be eliminated over time.
The airlines still have a few loose ends to tie up. Lane approved the merger despite a pending private antitrust lawsuit from airline customers.
And pilots from the former America West Airlines still have to sort out their seniority with those who came from US Airways in that 2005 deal. That must be resolved for the pilots to combine with those from American.
Customers won’t begin to notice changes until after the holidays, on Jan. 7, when the airlines begin combining operations. They first plan to offer reciprocal frequent-flier benefits.
Dec. 6 will likely be the last trading day for AMR stock (AAMRQ) and US Airways stock (LCC). Trading of the new American stock, using the ticker symbol AAL on the Nasdaq exchange, will begin Dec. 9.