American Airlines and US Airways to Merge

American Airlines and US Airways reached a deal with the government that lets the two form the world’s biggest airline and opens up more room at key U.S. airports for low-cost carriers.

The settlement announced Tuesday — if approved by a federal judge — would end a fight with the U.S. Justice Department and head off a courtroom showdown later this month.

It preserves hub airports in Phoenix, Philadelphia, Charlotte and four other cities for at least three years. And it caps a series of mergers that have already eliminated four big U.S. airlines and stoked fear about higher travel prices.

For American, the nation’s third-biggest airline, the deal lets parent AMR Corp. exit bankruptcy protection, repay creditors and reward shareholders.

At US Airways, the No. 5 U.S. carrier, shareholders will own 28 percent of the new company, employees stand to get more pay, and top executives will realize their dreams of running an airline even bigger than United or Delta.

The Justice Department said it extracted the largest divestitures ever in an airline merger. Attorney General Eric Holder said the agreement would ensure more competition on nonstop and connecting routes throughout the country.

via Mainichi

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza