American Airlines was founded in 1930 which headquartered in Forth Worth, Texas. American Airline is the fourth largest airline company in the worldwide, which serves 273 destinations. However, American Airlines filed for bankruptcy on November 2011.
US Airways was founded in 1937 which headquartered in Douglas. This airline is the sixth largest airline in the worldwide, which serves 198 destinations.
On 9th December 2013, American Airlines Group Inc was formed due to the merger of American Airlines and US Airways. This merger, approved by the Department of Justice, caused the American Airlines Group Inc to be formed.
Advantages of Merger
This merger caused the merged airlines to be the largest airline in the world with more than 100,000 employees worldwide. They are able to serve 6,700 daily flights to more than 330 destinations in more than 50 countries. The Department of justice believed this eleven billion dollar merger would help American Airlines to survive in the airline industry.
This merger would not only help American Airline to stabilize their finances, but it would also help American Airline and US Airway to compete with larger rivals such as Delta, United Continental and Southwest Airlines. The merger would cause the merged airlines to be more effective, efficient, and profitable. Therefore, the merged airlines would be able to provide the customers with a more flight choices which are more attractive. In addition, the merged airline would be able to expand its networks by providing more flight options for the overseas destinations. Lastly, the merger will also improve employees’ job security and compensation.
Disadvantages of Merger
There are several reasons for anti-trust to go against the U...
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...International, Chicago O’Hare International, Dallas Love Field, Los Angeles International, Miami International, New York LaGuardia International and Ronald Reagan Washington National.
• Ground Facilities
The settlement requires the merged airlines to give up the ground facilities at key points such as Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles International and Miami International.
This settlement banned American Airlines and US Airways from regaining the slots, gates and ground facilities. The gates, slots and ground facilities will be transferred to the airlines which currently do not operate large share of slots or gates.
The goal of this settlement is to increase the competition in the airline industry. By having a more competitive industry, it would lead to more choices and more competitive airfares which can be utilized by the customers.