American Airlines and US Airways announced on Thursday morning they're merging in a deal valued at $11 billion, creating the world's biggest airline.
Despite Thursday’s announcement, the merger is not expected to close until the third quarter of 2013. Analysts say it will be several months, possibly years, before passengers see any significant impact.
American's parent company is under bankruptcy protection, and a court will have to approve the deal. US Airways shareholders also need to sign off on it, as do the Department of Transportation and the Justice Department.
Even then, the new company could operate as two separate airlines for years.
The two carriers announced the deal this morning, putting value of the merger at $11 billion.
The combined carrier will eventually be called American Airlines and will rank as the world's biggest airline.
A press release from the airlines says US Airways CEO Doug Parker will run the combined airline.
“Today marks an exciting new chapter for American Airlines and US Airways. American Airlines is one of the world’s most iconic brands. The combined airline will have the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace. Our combined network will provide a significantly more attractive offering to customers, ensuring that we are always able to take them where they want to travel, when they want to go,” said Parker in a statement.
AA CEO Tom Horton will remain with the airline through the merger and transition period, “Together, we will be even better positioned to deliver for all of our stakeholders, including our customers, people, investors, partners, and the many communities we serve."
The combined airline will employ more than 100,000. In a press conference on Thursday morning the CEOs said they did not anticipate major layoffs with the mergers, due to the complimentary natures of the airlines. Of the 900 routes both airlines fly, only 12 overlap. The layoffs are anticipated to be in management.
The airline will also maintain all hubs operated by both airlines as well as all destinations. And no changes are anticipated for the frequent flyer programs for either airline.
Tulsa Mayor Dewey Bartlett released this statement about the merger:
"This is a tremendous opportunity for Tulsa as US Airways recognizes the significance of our talented workforce and their commitment to hard work.
The city of Tulsa is grateful that American Airlines and US Airways are committed to Tulsa and that our future in the Aerospace/Aviation industry looks very bright.
We’re thankful for the leadership of the entire community. From the beginning, 18 months ago, the Tulsa Regional Chamber, Tulsa City Council, mayors and city managers from outlying communities and the Tulsa County Commissioners created a unified effort to support our various industries at the airport, on which we rely so heavily for Tulsa's economic future.
Without the incredible community-wide support, what could have been a very tragic development for the employment of our city, has appeared to run full-circle and turned in the potential direction of promise and prosperity."
Tulsa Regional Chamber president Mike Neal also released a statement about the merger:
"While the American Airlines restructuring process was difficult at times, it ultimately proved successful as thousands of high-paying jobs were saved in our community. Across the country, today’s corporations are making decisions based on economies of scale. We are confident US Airway’s decision to merge with American Airlines, a longstanding corporate partner in Tulsa, will ultimately keep thousands of high-paying aerospace and manufacturing jobs here, in our community.
A merger such as this is not seen often. US Airways is a rising star in the airline industry, and this merger will create the world’s largest airline. American Airlines, a beacon of our nation’s history, and of Tulsa’s history, has been home to generations of skilled-workers. Tulsa’s manufacturing and aerospace workforce excels above all, a fact that did not go unnoticed during the fifteen month restructuring process. American’s highly-skilled Tulsa area employees contributed to the company’s success over a sixty-year period.
The newly formed company will have a robust network with more than 6,700 daily flights to 336 destinations in 56 countries, a strong financial foundation and one of the most modern and efficient fleets in the industry. Today’s announcement is outstanding for the Tulsa region and a win for Oklahoma.
The Chamber welcomes American Airlines and US Airways as a continued corporate partner in Tulsa and encourages the company’s commitment to the success of the Tulsa maintenance base, the largest non-military MRO base in the world, indirectly influencing the success of the suppliers and other businesses that serve the maintenance base.
The Chamber has been working with both companies for months striving to realize the best outcome for the employees at the American Airlines MRO and for the Tulsa region. Working with Governor Mary Fallin, Tulsa Mayor Dewey Bartlett, the Tulsa County Commission and other regional partners, we will maintain regular contact with the newly formed company in effort to encourage the company’s positive position to grow and continue investments in the Tulsa region."
The companies also unveiled a new website: http://newamericanarriving.com/
FOX23 will continue to monitor this story as it develops.