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AMR and US Airways: The last great American airline merger

January 10, 2013

THE bankruptcy courts in America have had to restructure distressed airlines so often that they may as well have installed check-in desks and duty-free shops. Of surviving carriers, US Airways has been through Chapter 11 proceedings twice, and United and Delta once each.Until recently AMR, the parent of American Airlines and its smaller sibling American Eagle, proudly resisted using insolvency to get out of trouble. It had also stayed out of the industry?s bout of mega-mergers, in which Delta has combined with Northwest, Southwest with AirTran and United with Continental. But in late 2011, as it staggered through its fourth successive year of losses, AMR filed for Chapter 11, in the hope of emerging leaner, stronger and still independent. Now it looks like falling prey to a reverse takeover from the much smaller US Airways, creating one of the world?s largest airlines by capacity.US Airways? boss, Doug Parker, has won backing for the bid from AMR?s disgruntled labour unions, his own staff and Wall Street analysts, forcing AMR to negotiate. On January 9th its board met to examine US Airways? proposal: there was no immediate announcement but earlier AMR?s boss...

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