Houston: Ending a year-long speculation, US Airways and American Airlines on Thursday agreed to merge in a whopping USD 11 billion landmark deal to create the world's biggest airline.
The boards of the companies have unanimously approved the deal, valued at USD 11 billion, thus paving a way for the creation of the nation's largest airline.
The deal is still subject to regulatory approvals. If approved, the American Airlines and US Airways deal will be the third mega-airline merger in just five years.
The new airline will be led by US Airways CEO Doug Parker, who will serve as chief executive officer and a member of the board of directors. Tom Horton, American's CEO, will serve as chairman of the combined airline's board through its first annual meeting of shareholders, the ABC news reported.
Under the terms of the deal, US Airways shareholders would own 28 per cent of the combined airline, while American Airlines shareholders, creditors, labour unions and employees would own 72 per cent, the airlines said in a joint statement.
The merger would create a company with the size and breadth to compete against United Airlines and Delta Air Lines, which have grown through mergers of their own in recent years and are currently the biggest domestic carriers.
The merger would reduce the number of major US airlines to four: the new American, United, Delta and Southwest.
The companies said merging would create savings of more than USD 1 billion a year.
The new American would have more than 900 planes, 3,200 daily flights and about 95,000 employees, not counting regional affiliates.
It will be slightly bigger than United Airlines by passenger traffic, not counting regional affiliate airlines.
The airline will be headquartered in Dallas-Fort Worth and will maintain a "significant corporate and operational presence in Phoenix," the statement said.
First Published: Thursday, February 14, 2013, 08:53