Us Air Proposes Takeover Of American

By Author: Steve Robinson
Total Articles: 468
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It is not clear what impact a potential takeover of American Airlines by US Airways would have on cheap travel options, including cheap airplane tickets and cheap vacation packages.

On the one hand, US Airways claims that the combined airlines would be stronger than if they remained separate, enabling both to better compete. On the other hand, airline mergers often result in less competition, ultimately resulting in higher ticket prices.

US Airways has met with American Airlines creditors to discuss a possible merger of the two airlines that would reduce the number of major U.S. airlines to three. American filed for bankruptcy protection in November of last year and is in the process of restructuring its operations.

US Airways would like to complete its proposed takeover prior to American’s parent company AMR exiting bankruptcy proceedings. American recently successfully applied to the court to extend its filing deadline for its reorganization plan until the end of September. It has announced plans to request its labor union contracts to be voided.

Over the last five years the airline industry ...
... has been going through a period of consolidation, with Southwest taking over AirTran most recently, United Airlines and Continental Airlines merging in 2010, and Delta combining with Northwest Airlines in 2008.

US Airways has hired advisers to consider a bid to purchase American. Currently American because of its bankruptcy status is barred from filing competing plans.

US Airways has started purchasing Internet domain names that could be used in the event of a merger, including usairways-american and american-usairways.

A merger between these airlines would give American an enhanced presence in the East where it has been dominated by Delta and United. It would also provide American a more competitive presence in the West, given US Airways major presence in Phoenix, AZ.

Airline experts view consolidation as an excellent opportunity for airlines to control costs.
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