Stay Connected
Atlanta Black Star/Business
Business

American Airlines Cleared For Merger With US Airways

Posted byBy Leo | Published on: CommentsComments (0)

A federal court approved American Airlines’ reorganization plan on Wednesday, clearing the way for the airline’s exit from bankruptcy and removing the final hurdle to its merger with US Airways to form the world’s largest airline.

The ruling by Judge Sean H. Lane of the United States Bankruptcy Court for the Southern District of New York puts an end to a rocky two-year period for the airline, which sought court protection to reorganize its business, shed debt and rewrite labor agreements.

A central feature of the reorganization plan was the merger with US Airways, a prospect that had the backing of American’s creditors and employees. But the plan was temporarily disrupted after a challenge from the Justice Department over the summer on the grounds that it would hurt competition and lead to higher fares.

The airline as well as labor groups welcomed the ruling, which offers a chance for American to reclaim a top spot among the nation’s carriers. The merged airline will have 6,700 daily flights, 1,500 airplanes and about 100,000 employees. Its combined annual revenue will reach about $38 billion.

 American, which has lagged rivals in recent years, was the last of the legacy airlines to file for bankruptcy, stumbling from its perch as the nation’s top carrier after falling behind Delta Air Lines and United Airlines. Both of those airlines had already reorganized their businesses in recent years and had expanded through mergers of their own.

American and US Airways argued that a combination was the best hope to provide travelers with a similar global network capable of competing with Delta and United or risk being left behind.

But American will have to work hard to convince passengers that a larger carrier can offer better and more customer-friendly service. Airline mergers are usually bumpy events, often marred by reservation problems and computer glitches. United, for example, suffered repeated flight delays and disruptions last year because of problems associated with its merger with Continental Airlines.

Read the full story here.

Independent journalism still matters.

We hope this story was worth your time. For over 14 years, Atlanta Black Star has stayed Black-owned and independently run. We didn't get here by waiting on ad budgets that were never built to prioritize us. Our readers did that.

Corporate support for Black media has always been thin. Outlets like ours get roughly 1% of the $170 billion spent on U.S. advertising each year, and that margin is shrinking further as advertisers walk back the DEI-linked commitments they made in 2020. That's the backdrop. It's not why we're asking.

The wider picture isn't any steadier. Newspaper ad revenue has fallen more than 80% since 2005, and local newsrooms are closing at a rate of roughly two a week nationwide. When outlets go under, it's rarely the ones built to center a Black perspective from the ground up that get to stick around.

We know a request for support isn't why you came here. But without readers choosing to fund this work directly, the depth of reporting we can do at home and abroad shrinks along with everyone else's. If you're not in a position to give, that doesn't change how much we value you as a reader.

If you are able to, a recurring contribution does more for us than a single one-time gift, because it lets us plan the next investigation instead of just the next invoice. It takes about 30 seconds, no long form, no account. Thank you for continuing to support independent journalism and freedom of the press.

Give once Give monthly Support another way

Related Stories

Back to top