The Struggle of American and US Airways: to Merge or Not to Merge
In February, AMR’s (AAMRQ.PK) American Airlines and US Airways (NYSE:LCC) announced a detailed, years-long integration plan. Both executives and company lawyers were expecting Thursday to be the end of American’s bankruptcy proceedings and beginning of the $11-billion merger between the two airline carriers, a merger seen as the capstone of the era of consolidation that helped the industry return to profitability.
The new airline was expected to be a stronger competitor than both United Continental (NYSE:UAL) and Delta (NYSE:DAL), but a lawsuit brought by the Department of Justice last Tuesday, based on antitrust grounds, presents quite a delay. An antitrust lawyer for US Airways told The Wall Street Journal last week that the airlines “hope to get to trial before the end of the year.”
Here’s a look at the pros and the cons of such a merger.