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American Airlines deal creates world’s largest airline

Deal is latest in a succession of US airline mergers
  Wikimedia Commons
American Airlines Boeing 777-200
Opposition groups concerned reduced competition will increase prices

Emerging from bankruptcy protection, American Airlines has merged with US Airways to create the world’s largest airline. Having already survived government challenges and criticism from consumer groups, the merger now faces the arduous task of integrating the two airlines.

The deal is the latest in a succession of mergers that will leave four airlines in control of more than 80 per cent of the US air travel market. Although opposition groups expressed concern that a reduction in competition would result in higher prices, leaders from both airlines denied this would occur.

As American emerges from bankruptcy, it will mark a triumph for chief Doug Parker and his executive team at US Airways, who convinced American’s creditors a merger was more beneficial than letting it remain an independent company. The new company will debut under the ticker symbol AAL and expects to generate in excess of $1 billion in annual cost savings beginning in 2015.

Big challenges remain, starting with a merger of its computer reservation systems. The airline hopes to avoid the tribulations that plagued United Airlines’ reservations after its 2010 merger with Continental.


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