DALLAS -- American Airlines and US Airways made the official announcement before dawn Thursday that they intend to merge operations and hope to complete the transition within months.
“The combination of American and US Airways brings together two highly complementary networks with access to the best destinations around the globe,” said Tom Horton, Chairman, President, and Chief Executive Officer of American Airlines, in a statement.
Boards from both airlines unanimously approved a definitive merger agreement late Wednesday.
The merged carrier will retain the iconic American Airlines name and brand and will be based in Fort Worth with significant corporate and operational presence in Phoenix. The US Airways name and brand will eventually disappear. In the announcement early Thursday, the carriers said they expect to complete the merger by the end of the third quarter of 2013.
Leaders for the two airlines will share responsibilities for the first year. AMR CEO Tom Horton will be chairman of the board of the combined company and US Airways CEO Doug Parker will be CEO of the new American. But after the first year, Horton will leave the company and Parker will take over both titles, the airline said in a statement on Thursday.
The merged airline said it expects to maintain all eight of its combined hubs and service to all destinations. American already has hubs in D/FW, Miami, New York, Chicago and Los Angeles. It will now pick up US Airways three major cities with Phoenix, Charlotte and Philadelphia.
“After months of exhaustive analysis and a thorough review of all alternatives, we concluded that this merger is the best outcome for our company, delivering not only the greatest value for our financial stakeholders, but also positioning us well for sustainable success over the long term,” Horton added.
The combined airline will offer more than 6,700 daily flights to 336 destinations in 56 countries, the official announcement said. The combined airline is expected to provide the most service across the East Coast and central part of the U.S.
“Both airlines expect that the regional carriers they own – AMR Corporation’s American Eagle and US Airways’ Piedmont and PSA – will continue to operate as distinct entities, providing seamless service to the combined airline,” the official announcement added.
“The combined airline will have the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace,” said Doug Parker, Chairman and Chief Executive Officer of US Airways, in a statement. “I am grateful for all that Tom [Horton] has done to ensure that American is in the best position possible for future success and am delighted he has agreed to remain on board to assist with the transition.”
“I am particularly pleased for the employees of both US Airways and American,” Parker added in the official announcement. “This merger will create a stronger company, with the path to improved compensation and benefits and greater long-term opportunities for all our employees. We are grateful to have the support of both companies’ unions and thank them and their leaders for their hard work and vision.”
AMR stakeholders will own 72% of the new company and US Airways shareholders will get 28% of of the new company’s common stock when it is eventually issued.
The merger still requires a number of other approvals including from American’s creditors, its bankruptcy judge and government approvals in the United States and Europe.
“Each carrier’s employees will receive reciprocal travel privileges as quickly as possible,” the announcement explained. “The merger will also provide the path to improved compensation and benefits for employees.”