Earlier today, at its annual general meeting for shareholders, the shareholders of Tempe, Arizona based US Airways voted to approve the merger between US Airways and Fort Worth, Texas based American Airlines. The merger, which would create the world’s largest carrier by passengers carried, was announced on February 14, 2013.
Under the terms of the merger agreement, US Airways shareholders would get 28% of the combined shares in the company. The all-stock transaction would yield a company with annual revenues of nearly $38.7 billion, and headquartered in Dallas Fort Worth. The new board would include 5 AMR creditor representatives, 3 current AMR directors, and
4 US Airways representatives. US Airways shareholders did not question any component of the merger agreement proposal before voting.
According to US Airways CEO Doug Parker, the merger is still on track to close by the end of the 3rd quarter. Clearance for the merger is still required from the Department of Justice and the AMR bankrupcy court. Parker said at the meeting that if forced too, the new American will give up precious landing slots at Washington’s Reagan National Airport, where the merged carrier will hold a dominant market share. However, Parker warned that the first markets to lose service as a result of divestment would be small cities. Parker said that the new American preferred to keep its entire slot holdings intact post merger;
There is no such standard in antitrust law that says airlines can’t have that size of departures from any given airport.
Parker also tried to downplay any antitrust concerns surrounding the deal.
It [the new American] creates an important strong competitor to United, Delta and Southwest …. We will create a premier global airline.
Recent testimony from the US Government Accountability Office (GAO) before Congress warned that Philadelphia International Airport, currently US Airways’ second largest hub and trans-Atlantic gateway, could lose service post merger to nearby New York JFK. However, Parker, in responding to a question from a Philadelhpia based frequent flyer and shareholder appeared to allay these concerns.
“Our hub [in Philadelphia] does well for US Airways… it will do even better as a part of American”
The new American will operate a mainline fleet of more than 940 aircraft, operating more than 6,700 flights per day to 336 destinations around the globe.