US Airways-American merger inches closer to reality
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By FOX 10 News - Staff Report
TEMPE, Ariz. -
A major deal is in the works between American Airlines and US Airways. Our hometown airline could merge with American as early as next week.
A Wall Street Journal report states the deal could be announced as early as next week, while several other national reports say it could take a few more weeks.
Either way, it appears it's more likely the merger will happen than not.
The merger is worth more than $10 billion and if the deal goes through, it would create the world's largest airline.
American Airlines filed for bankruptcy back in November 2011 and some industry experts say this still may not be enough to save the company.
"Don't get too mislead by size, a brontosaurus was very big at one time too, but it didn't do real good...size isn't the issue, it's revenue streams and competitive flows and I think this will improve it, it won't fix all their problems but it will improve it," said Boyd Group President Michael Boyd.
If the merger happens, what will become of our hometown airline US Airways?
US Airways CEO Doug Parker is expected to run the new airline, while American Airlines CEO Tom Horton will likely move to a seat on the board of directors.
While this may be a good deal for both airlines, customers will lose out.
"Short term, I don't think much is going to change. People's wallets right now tell how they're going to pay for tickets right now. Long-term, I think we're going to pay more for ticket prices," said FareCompare.com's Rick Seaney.
Could we see more airfare wars? More options for travelers?
Here's what the Dean of Arizona State University's W.P. Carey School of Business believes.
"US Airways or American, once they're merged, is not going to walk away from Phoenix. It's a big hub and Southwest is a big competitor here, and they're not likely to just walk away and let Southwest have the Phoenix hub to themselves," said Dean Robert Mittelstaedt.
One traveler told FOX 10, "I think that Southwest and JetBlue will continue to undercut them when it comes to price and even where services are concerned."
US Airways CEO Doug Parker has already said a merged airline would keep the "American" name, and have its headquarters where American is right now, in Fort Worth, Texas.
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