Bankrupt American Airlines is about to become the world’s largest airline -- by agreeing to merge with US Airways in an $11billion dollar deal announced Thursday. The deal comes after months of negotiations, and as Jessica Stone reports this could mean more options for international travelers.
In the global air battle for passengers, American and USAir are hoping - bigger is better. After a couple of rounds in bankruptcy court for USAir and a 2011 bankruptcy filing for American Airlines, Thursday’s merger agreement plans to offer 6,700 daily flights to 336 destinations in 56 countries.
Thsmas horton, CEO of American Airlines, said, "Thomas Horton, American Airlines CEO: "By combining the strengths of both companies we will be delivering the most value to our owners and the greatest benefits to our customers and our people."
Doug Parker, CEO and Chairman of US Airways, said, "Customers of both airlines can enjoy the same connections they always have plus many more as our networks come together."
The merger adds more routes to Europe, Latin America and the Caribbean....but analysts say Asia - the fastest growing market of travelers - will continue to be underserved by the new carrier. For example, Delta flies to more than 30 destinations in China and some 15 in Japan through its partners.
The new combined airline has already released this commercial - trying to attract new corporate travelers away from competitors. Its leaders say it can bring in an additional 900 million US dollars in new revenue. It’s a tall order - for any American airline. According to Skytrax, consumers currently rate Middle East and Asian-based carriers among the top 10. In fact, an American carrier doesn’t even appear on the World Airline Awards top 100 airlines list - until number 51. American is number 84 on this list. Passengers are already weary of increased ticket prices and weary of the merger forcing them even higher.
Lauren Russell, American Airlanes Passenger, said, "Obviously costs will probably go up. I mean, that’s also another inevitable thing in this industry that they’re always going to charge you for something. It’s one of those struggling industries that are having to come up with fees to make a profit."
The new airline will have more than 900 planes and 95-thousand employees. The deal still has to be approved by the US Departments of Transportation and Justice.
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