New Airline Merger To Be The Largest In The World

American Airlines and U.S. Airways reached an antitrust settlement to allow a merger between the two; making them the largest air conglomerate, by traffic, in the world. Though the agreement still needs to be signed off by a federal judge, they foresee all signatures needed, will complete the transaction by mid-December.

Once the pair has merged they will make American Airlines Group, Inc. and plan on having a $1 billion total annual savings and revenue gain from the merger. Though some believe that this merger will lead to fewer flights and higher fees, antitrust and airline industry experts believe this is a victorious venture for the airline community, and if they had not merged, they would have each given up several slots or gates anyways.

This settlement will, in truth, only affect about 112 of the new carrier’s planned 6,500 flights a day. There was also an outpouring of support from an intense lobbying campaign, bragging supporters from eight city mayors, 183 Congress members, and 100,000 of their employees. This support definitely aided in changing the minds of the judicial system, who originally thought this would be a bad idea, raising costs, and depleting the competition.

American Airline Group has agreed to give up several spots in high traffic airports across the country, leaving nearly 100 sought after slots open to the competition. AAG also agreed to continue having at least one flight a day to the less traveled destinations, something the airline system worried would be forgotten due to their minimal profit margin.

All in all this merger promises a larger and more illustrious airline group joining ranks with Delta, Southwestern, and United Continental Holdings. Southern showed, after their merger, that though it seems the merger takes away more opportunities, the airline can grossly profit from a combination of two, already popular, airlines.

Author: The Blue Route

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