US Airways shareholders support American Airlines merger deal
13 July 2013
US Airways shareholders came out in strong support of a proposed merger deal with American Airlines yesterday, voting overwhelmingly in its favour, clearing a major hurdle and setting the stage for a regulatory approval.
At what might well be their last annual meeting as US Airways, 99 per cent of investors approved of the deal, giving them a 28-per cent stake in the combined company on approval of the proposed merger by regulators.
While the road to regulatory approval has been far from smooth, the carriers continue to believe that the deal would close in the third quarter as predicted. The transaction also remained subject to other standard closing conditions.
According to Doug Parker, US Airways CEO and incoming chief of the new company, the approval came as a major milestone on the path of the company towards completing the merger, and it continued to make excellent progress overall, thanks to the focused efforts of the dedicated representatives from both companies.
The announcement of the $11 billion merger came in February as part of AMR Corp's plans to emerge from bankruptcy. The carrier would be branded as the ''new American Airlines'' and would be headquartered in Dallas-Fort Worth.
Meanwhile, the US Department of Justice, along with attorneys general from 19 states, was weighing the impact of the merger on competition and flights for consumers. The company's restructuring plan to emerge from bankruptcy, has been posted for a 15 August hearing by a federal judge.
According to aviation observers the deal would be expected to get the regulators nod, in line with the justice department ruling in the recent airline mergers of United and Continental, Delta and Northwest, and Southwest and Air Tran.
An area that might come under scrutiny may be US Airways-American's concentration of takeoff and landing rights at Washington's Reagan National Airport. The new American would control nearly 70 per cent of the market share at Reagan after the acquisition of 42 slots from Delta Air Lines two years ago, which translated into round-trip flights.
Delta, in exchange picked up 132 slots at New York's LaGuardia airport used by US Airways Express flights. The carrier also paid $66.5 million to US Airways, which in turn got international rights to fly in 2015 to Sao Paulo, Brazil.
The Department of Justice, in 2010, required Continental to sell takeoff and landing rights at its hub in Newark, NJ, to Southwest Airlines as a condition to regulatory approval for a merger with United.