American Airlines, US Airways announce $11 billion merger

In this Tuesday, Jan. 29, 2013, photo, an American Airlines passenger plane takes off at Miami International Airport in Miami. American Airlines and US Airways announced Thursday, Feb. 14, 2013, that they're merging in a deal they value at $11 billion, creating the world's biggest airline. The combined carrier will be called American Airlines but run by US Airways CEO Doug Parker. (AP Photo/Alan Diaz)

In this Tuesday, Jan. 29, 2013, photo, an American Airlines passenger plane takes off at Miami International Airport in Miami. American Airlines and US Airways announced Thursday, Feb. 14, 2013, that they're merging in a deal they value at $11 billion, creating the world's biggest airline. The combined carrier will be called American Airlines but run by US Airways CEO Doug Parker. (AP Photo/Alan Diaz)

In this Thursday, Sept. 27, 2012, photo, US Airways jets are parked at their gates at the Charlotte/Douglas International airport in Charlotte, N.C. Patched together from several scrappy regional carriers on the brink of bankruptcy, US Airways has often been ridiculed within the aviation industry and remains a perennial afterthought among travelers. But it hopes to shed that image by merging with the larger American Airlines, in a deal which will catapult the two to the top of the industry. (AP Photo/Chuck Burton

In this Thursday, Sept. 27, 2012, photo, US Airways jets are parked at their gates at the Charlotte/Douglas International airport in Charlotte, N.C. Patched together from several scrappy regional carriers on the brink of bankruptcy, US Airways has often been ridiculed within the aviation industry and remains a perennial afterthought among travelers. But it hopes to shed that image by merging with the larger American Airlines, in a deal which will catapult the two to the top of the industry. (AP Photo/Chuck Burton

— Air fares to Florida will remain the same for now, but otherwise it’s too early to tell what the local effect may be of the American Airlines and US Airways merger, an American Airlines representative said Thursday.

The two airlines announced an $11 billion merger Thursday that will turn American into the world’s biggest airline, with some 6,700 daily flights and annual revenue of roughly $40 billion.

The latest deal will mean that the four biggest U.S. airlines are all the product of mergers that began in 2008. Those deals bring benefits, but they also show that putting together two airlines smoothly isn’t easy.

The new joint airline will operate under the American Airlines name, and base its operations in Fort Worth, Texas, with US Airways CEO Doug Parker at the helm.

Locally, the merger of two airlines may not affect travelers at Southwest Florida International Airport in Lee County, nor at Fort Lauderdale-Hollywood International Airport, an airport in Broward County where many Collier and Lee residents commute to for traveling.

“At this early stage, we don’t know what, if any, impact there will be to flights served in Southwest Florida International Airport,” said Victoria Moreland, spokeswoman for the Fort Myers airport.

Moreland said the two airlines have no overlapping routes to Fort Myers. At the Fort Myers airport, US Airways serves the east coast; American Airlines serves the Midwest.

In 2012, US Airways reported 748,226 passengers, or 10.18 percent of the local market. Last year, American Airlines had 463,516 passengers, or 6.31 percent of the total passengers for 2012, according to Southwest Florida International Airport’s website.

At Fort Lauderdale-Hollywood International Airport, Broward Aviation Department spokesman Gregory Meyer said the merger will have minimal effect on the airport and its operations.

At the Broward airport, both airlines are in the same terminal and concourse. At Fort Lauderdale-Hollywood International Airport, American Airlines offers 17 flights a day, while US Airways has 20.

“It’s too early to tell what, if any, change there will be to service,” Meyer said.

Airline officials expect the transaction to be completed in the third quarter of 2013, according to the combined carrier’s website.

The combined network will serve 15 locations across Florida — Daytona Beach, Fort Lauderdale, Gainesville, Jacksonville, Orlando, Miami, Melbourne, Palm Beach, Pensacola, Fort Myers, Sarasota, Tallahassee, Tampa, Valparaiso-Fort Walton and Key West.

Some of the work on the latest combination is already done. Pilots from both airlines have agreed to the outlines of a deal that should make it much easier to get a final, joint contract. Parker is inclined to use American’s computer systems, such as those that track reservations and passenger information, he said on a conference call. He said past mergers have shown that it’s easier to use the bigger airline’s technology, because then fewer people at the smaller airline need to learn it.

Noting those factors, JP Morgan analyst Jamie Baker predicted a “relatively smooth” transition.

Since 2008, Delta gobbled up Northwest, United absorbed Continental and Southwest bought AirTran Airways. Including this latest merger, American, United, Delta and Southwest would control about three-quarters of U.S. airline traffic.

The rapid consolidation has allowed the surviving airlines to offer bigger route networks that appeal to high-paying business travelers. And it has allowed them to limit the supply of seats, which helps prop up fares and airline profits.

That concerns some consumer advocates, but Parker sought to assure travelers that the merger helps them too — by creating a bigger rival to United and Delta.

“There are two very large airlines right now and this creates a third,” Parker said in an interview. “It provides good competition to those two.”

The new American would have more than 900 planes and about 95,000 employees, not counting regional affiliates. It will be slightly bigger than United Airlines by passenger traffic, not counting regional affiliate airlines.

Most airline mergers have resulted in a reduction of flights and shrinkage at some hubs, but Parker said this deal will be different because US Airways and American overlap on just 12 routes.

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DALLAS — American Airlines and US Airways say they have agreed to merge in an $11 billion deal that would create the world's biggest airline.

The combined carrier will be called American Airlines but run by US Airways CEO Doug Parker.

The boards of the two airlines unanimously approved the deal late Wednesday, and the companies announced the agreement Thursday.

The merger would reduce the number of major U.S. airlines to four: the new American, United, Delta and Southwest.

The deal is a coup for smaller US Airways Group Inc., which pushed for a merger almost as soon as American parent AMR Corp. filed for bankruptcy protection in November 2011.

While Parker runs the company, AMR CEO Tom Horton will serve as chairman until its first shareholder meeting, likely in mid-2014.

"The combined airline will have the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace," Parker said in a statement. "Our combined network will provide a significantly more attractive offering to customers, ensuring that we are always able to take them where they want to go."

AMR creditors and shareholders including creditors will own 72 percent of the new company and US Airways shareholders 28 percent.

The companies said merging would create savings of more than $1 billion a year. The merger will be part of AMR's plan for exiting bankruptcy protection.

The airlines said they expect $1 billion in combined savings.

The companies had negotiated since August, when creditors pushed AMR to conduct merger talks so they could decide which earned them a better return: a merger or an independent American.

The deal would need approval by AMR's bankruptcy judge and antitrust regulators, who have permitted three other big airline mergers to go ahead since 2008.

The rapid consolidation has allowed the surviving airlines to offer bigger route networks that appeal to high-paying business travelers. And it has allowed them to limit the supply of seats, which helps prop up fares and airline profits.

The new American would have more than 900 planes, 3,200 daily flights and about 95,000 employees, not counting regional affiliates. It will be slightly bigger than United Airlines by passenger traffic, not counting regional affiliate airlines.

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