After weeks of waffling and speculating, several news outlets report that the $11 billion merger between US Airways and American Airlines will arrive as soon as this week. This news follows a number of reports late last week that this was almost a done deal. If approved, the merger would create the nation's largest airline, ahead of Delta and United, which merged with Continental in 2010, and would reportedly put US Airways chief Doug Parker as CEO of the new company, which would keep the name American Airlines. It would also get to keep that fancy new branding that American unveiled a couple of weeks ago.
Beyond those details, however, things get a little bit complicated. American Airlines, for instance, filed for bankruptcy protection 14 months ago, and so, 72 percent of its stock int he new company would belong to American's creditors who would also have to approve the deal. The deal will also need the approval of both boards, a bankruptcy judge in New York as well as federal regulators. Futhermore, airline mergers are just complicated to begin with. "Airline mergers are often rocky," explains The New York Times's Jad Mouawad, "involving complex technological systems, big reservation networks as well as large labor groups with different corporate cultures that all need to be combined seamlessly." Reuters' sources warned, "Negotiations are continuing and could still be delayed or fall apart."
This is all to say, this is a good week for the big US Air-American Air merger to finally go through. It is also, however, a week during which many things can go wrong. From the consumer's point of view, though, not much will change. Sure, you'll have fewer airlines to choose from, but the rapid consolidation of the airline industry has been happening for years. At least we know from experience that the shrinking number of choices won't make flying more expensive, though.
This article is from the archive of our partner The Wire.
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