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Fly the merging skies

14/02/13 19:26 CET

Fly the merging skies
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The consolidation in the skies continues with the merger of American Airlines and US Airways Group.

That will create the world’s biggest airline in terms of passenger traffic and with a combined equity value of 8.25 billion euros ($11 billion).

US Airways Chief Executive Doug Parker said: “You know sometimes all the planets need to align and it’s taken a while for us to get here, but fortunately we’ve come to an agreement that makes sense for all of our customers, all of our employees, for our investors, and we couldn’t be happier.”

The two airlines together had turnover of 29 billion euros last year. Their combined fleet is 1,500 planes, serving 336 destinations in 56 countries with 100,000 employees.

Savings for airlines, not passengers

Rick Seaney – boss of farecompare.com – says the deal may make economic sense, but passengers won’t get much out of it: “In airline mergers, the people that benefit the most are Wall Street, to be honest, consumers end up paying more for airline tickets in general, they have less convenience because typically during mergers there’s cutbacks in flights and schedules.”

This is the fourth major merger in the US airline industry in less than five years and it means the survivors will be able to put up fares as yet another competitor is eliminated.

Unions for the carriers’ pilots, flight attendants, and ground service workers have said they support the deal, the machinists union is holding out for the completion of work contract negotiations before backing it.

The companies expect one-time transition costs of 900 euros over the next three years, with annual savings of 750 million euros in 2015.

Copyright © 2014 euronews

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