Global Vision

Global Vision

Saturday, March 22, 2014

American Airlines, US Airways agree to merge: $11 billion deal

Journey towards World Largest Airline has began.

Finally the judge approved a settlement resolving U.S. regulators' opposition to a merger between AMR Corp (American Airlines) and US Airways Group Inc., allowing AMR to exit bankruptcy and close on a tie-up creating the world's largest carrier.

US Airways (LCC) had long been looking for a merger partner, but probably didn't imagine it would find a deal with American Airlines.
AMR Corp. (AAMRQ) — parent of American Airlines — emerged from bankruptcy with a deal in place to merge with US Airways, creating the world’s largest airline in the process. this was the only way to retained American Airlines Iconic brand name.


The deal will also help American and US Airways to compete against United Continental Holdings  and Delta Air Lines  — and a chance for American Airlines to pay back its creditors.
Airlines has also planned to eliminate US airways tag and bring under one banner of American Airlines.
On my opinion, the main motive of the merger is to boost the revenue for which airlines may start code-sharing. Code sharing will help them to cover most of the flights between American Hub and this is the strategy which can downsize other carrier in United States and can make them a leader and a global carrier. After the deal they have started with the small step by selling tickets on each other flights. Eventually if they succeed, they will also plan to merge theirs fleets to improve networks with efficiency. 

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