Airline merger gets Justice Department nod

The US Justice Department has reached a deal allowing US Airways to merge with American Airlines.

The US Justice Department has reached a deal allowing US Airways to merge with American Airlines.

Pending approval from the US Bankruptcy Court, the merger deal's completion is expected in December.

The resolution comes after the feds sued to block the merger in August, fearing it would unfairly bind competing airlines and boost prices for travelers.

Airports in several large cities, including Chicago, New York, Washington, and Los Angeles will be required to scale back on flights from the merged airline. For example, it will have fewer departing flights from Washington's Reagan National Airport, yet it will remain the airport's dominant carrier.

The agreement also stipulates that lower-cost carriers should be granted more access to Boston Logan International, Chicago O'Hare International, Dallas Love Field, Los Angeles International, Miami International, and New York LaGuardia International airports.

US Airways hubs in Charlotte, Philadelphia, and Phoenix and American hubs at Miami, O'Hare, New York's John F. Kennedy International Airport, and Los Angeles International will be maintained for three years, according to the Justice Department.

Last year, over 80 million passengers flew with American Airlines to 250 destinations worldwide, with the firm raking in more than $24 billion in revenue. In comparison, US Airways flew more than 50 million passengers to more than 200 destinations worldwide, making $13 billion in revenue.

When news of the deal hit the stock market, shares of American Airlines' parent company jumped $2.38, or 26%, to $12. US Airways shares ended up 26 cents, or 11%, to $23.53.

Other airline mega-mergers in recent years include Delta with Northwest and United with Continental.

US Airways and American Airlines announced the merger in February. In June, the airlines unveiled the senior leadership team and board of directors for the combined company, which will be named American Airlines and based at American's headquarters in Fort Worth, TX.

Corporate communications leaders at both companies were not immediately available to comment on how the merger will alter the PR teams' structure.

In June, US Airways VP of corporate communications John McDonald told PRWeek the companies were “way ahead of the process” on post-merger communications.

He said the Justice Department's announcement does not affect the communications teams at either company. No further integration plans or decisions will be made until the airlines merge, McDonald told PRWeek on Wednesday.

“We are still moving forward and will be working into 2014 to integrated the teams,” he said. “In between now and then, we will continue to work really closely with our counterparts at American Airlines. We have a one-team approach when it comes to issues of the merger and the integration process.”

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in