|U.S. Airways CEO Doug Parker, right, and American Airlines CEO Tom Horton pose after a news conference at DFW International Airport Thursday, Feb. 14, 2013|
This past Valentine’s Day we all learned about a potential merger between American Airlines and U.S. Airways. It seems as though Cupid’s arrow struck a solid hit. On March 27th Judge Sean H. Lane of the U.S. Bankruptcy Court in Manhattan, New York announced his support for the $11 billion merger.
Provided all goes as planned, the new American Airlines will be the “world’s largest airline.” In the last five years, America’s 8 major airlines have been consolidated down to four.
• Delta and Northwest
• Southwest and AirTran
• United and Continental
• and now, American and U.S. Airways
One of the driving forces behind this merger is an excess of airplanes as compared to air travelers. The new, bigger airline will (hopefully) be more capable of taking on the rising fuel costs without raising airfare.
The American – US merger isn’t yet a done deal. Judge Lane has deferred giving his official blessing pending consideration of the severance package that will be offered to American Airlines’ outgoing CEO, Tom Horton.
“The merger is an excellent result. I don’t think anybody disputes that” said Judge Lane on March 27th during a court hearing. On the table is a $20 million severance package for the soon-to-be former CEO. Judge Lane’s hesitation to officially allow the merger and package lies in the possibility that such a large payment to Horton may violate prohibitions in bankruptcy law.
Judge Lane stated that he would issue a written ruling explaining his decision regarding the severance package.
American and U.S. Airways are two of the airlines operating out of VPS. Together, they provide non-stop service to Dallas, Charlotte, NC, and Washington DC. For more information about the airline merger, or if you have questions regarding our services at VPS and if/how this will affect your travel plans, get in touch with us. We are on Facebook and Twitter. You can also email us.
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