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American Airlines Group

(Redirected from US Airways-American Airlines merger)

American Airlines Group Inc. is an American publicly traded airline holding company headquartered in Fort Worth, Texas. It was formed on December 9, 2013, by the merger of AMR Corporation, the parent company of American Airlines, and US Airways Group, the parent company of US Airways.[5] Integration was completed when the Federal Aviation Administration granted a single operating certificate for both carriers on April 8, 2015,[6] and all flights now operate under the American Airlines brand.

American Airlines Group Inc.
Company typePublic
IndustryAviation
PredecessorsAMR Corporation
US Airways Group[1]
FoundedDecember 9, 2013; 10 years ago (2013-12-09)
Headquarters
Fort Worth, Texas
,
United States[1]
Number of locations
350 destinations[2]
Area served
Worldwide[3]
Key people
ServicesAir transportation
RevenueIncrease US$52.8 billion (2023)
Increase US$3.03 billion (2023)
Increase US$822 million (2023)
Total assetsDecrease US$63.1 billion (2023)
Total equityNegative increase US$(5.2) billion (2023)
Number of employees
132,100 (2023)
Divisions
Subsidiaries
Websiteaa.com
Footnotes / references
Financials as of December 31, 2023.[4]

The group operates the largest airline in the world, as measured by number of passengers carried, by fleet size and by scheduled passenger-kilometers flown. The company ranked No. 70 in the Fortune 500 list of the largest United States corporations based on its 2019 revenue,[7] but, impacted by the COVID-19 pandemic, it lost $2.2 billion in the first quarter of 2020 alone and accepted government aid.

History

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Merger proposals and plans

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In January 2012, US Airways Group, the parent company of US Airways, expressed interest in taking over AMR Corporation, the parent company of American Airlines.[8] In March, AMR's CEO Thomas W. Horton said that the company was open to a merger.[9] US Airways told some American Airlines creditors that merging the two carriers could yield more than $1.5 billion a year in added revenue and cost savings.[10] On April 20, American Airlines' three unions said they supported a proposed merger between the two airlines.[11] With AMR under Chapter 11 bankruptcy protection, American Airlines had been looking to merge with another airline. Earlier in July, a bankruptcy court filing stated that US Airways was an American Airlines creditor and "prospective merger partner"; on August 31, US Airways CEO Doug Parker announced that American Airlines and US Airways had signed a nondisclosure agreement, in which they would discuss the possibility of a merger.[12]

In February 2013, American Airlines and US Airways announced plans to merge, creating the largest airline in the world by some measurements. In the deal, which was expected to close in the third quarter of 2013, stakeholders of AMR would own 72% of the company and US Airways shareholders would own the remaining 28%. Rothschild & Co served as the investment bank for the transaction.[13][14] The combination was considered a "merger of equals" between the two airlines, but retaining the more well-established "American" name going forward,[15] and accordingly the holding company was renamed American Airlines Group Inc.[16] The headquarters for the new group was also consolidated at American's headquarters in Fort Worth, Texas,[17][18] but the US Airways' management team, including CEO Doug Parker, retained most operational management positions.

A judge approved the merger on March 27, 2013, but denied a proposed $20 million severance package to AMR chief Thomas W. Horton.[19] On July 12, US Airways shareholders approved the proposed merger.[20] Horton later received a smaller $17 million dollar severance.[21]

Attempts to block the merger

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On August 13, 2013, the United States Department of Justice, along with attorneys general from the District of Columbia, Arizona (headquarters of US Airways), Florida, Pennsylvania, Tennessee, Texas (headquarters of American Airlines),[22] and Virginia filed a lawsuit seeking to block the merger, arguing that it would mean less competition and higher prices. American Airlines and US Airways both said that they would oppose the lawsuit and defend their merger.[23] In early October 2013, the Attorney General of Texas rescinded the anti-trust lawsuit.

The Department of Justice reached a settlement on November 12, 2013, requiring the merged airline to relinquish landing slots or gates in 7 major airports.[24] Under the deal, the new American was required to sell 104 slots at Ronald Reagan Washington National Airport and 34 slots at LaGuardia Airport. It was also required to sell gates at O'Hare International Airport, Los Angeles International Airport, Logan International Airport, Dallas Love Field and Miami International Airport.[25] Some of the slots were expected to be sold to low-cost carriers such as JetBlue and Southwest Airlines.[26]

A private antitrust suit, filed by a group of 40 passengers and travel agents, also sought to block the merger.[27] American's bankruptcy court judge refused to enjoin the two airlines from merging, saying that the group did not demonstrate that the merger would irreparably harm them.[28] The plaintiffs' lawyer appealed and was turned down at the U.S. District Court level and was further rebuffed at the Supreme Court after Justice Ruth Bader Ginsburg denied a stay request filed by him.[29]

Implementation of merger

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Following the Department of Justice approval, the merged Group company traded on the NASDAQ stock exchange under the symbol AAL.[30][31] In December 2013 a severance package valued at about $17 million was agreed for Tom Horton, the outgoing AMR CEO, who had led American Airlines through bankruptcy and the major merger.[32]

US Airways exited Star Alliance upon completion of the merger, and American retained its membership in Oneworld.

On July 13, 2015, American announced that it planned to discontinue the US Airways brand name by October 17, 2015, and on October 16, 2015, US Airways flew its final flight, US Airways Flight 1939, from Philadelphia to Charlotte to Phoenix to San Francisco to Philadelphia.[33]

In March 2021, American Airlines Group said that it will repay the US government debt by issuing a private offering of notes worth about $5 billion, half due in 2026 and half in 2029, and a $2.5 billion term loan credit facility.[34]

Corporate affairs

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Ownership and group structure

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American Airlines Group, Inc. is publicly traded under Nasdaq: AAL, with a market capitalization of about $6.4 billion as of August 2024,[35] and is included in the S&P 500 index.[8]

The group operates through its principal wholly owned mainline operating subsidiary, American Airlines.

It also has three subsidiaries, regional carriers Envoy Air Inc., Piedmont Airlines, Inc., and PSA Airlines Inc., that, together with three independent carriers, operate American Eagle under a codeshare and service agreement with American Airlines.[8]

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The key trends for American Airlines Group since December 9, 2013, the earliest date that American and US Airways were under common control, are shown below (as at year ending December 31):[36]

Operating
revenue
(US$ m) 		Net income
(US$ m) 		Number of
employees
(FTE, k)[a] 		Number of
passengers
(m) 		Passenger
load factor
(%) 		Number of
aircraft[a] 		Notes/
references
2014 42,650 2,882 113 197 82.0 1,549 [37]
2015 40,990 7,610 118 201 83.0 1,533 [37]
2016 40,180 2,676 122 198 81.7 1,536 [35][38]
2017 42,622 1,282 126 199 81.9 1,545 [35][38]
2018 44,541 1,412 128 203 82.0 1,551 [35][39]
2019 45,768 1,686 133 215 84.6 1,547 [35][39]
2020 17,337 −8,885 102 95.3 64.1 1,399 [40][38]
2021 29,882 −1,993 123 165 75.3 1,432 [41]
2022 48,568 127 129 199 82.9 1,461 [42]
2023 52,788 822 132 211 83.5 1,521 [4]

Notes

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  1. ^ a b at year end

References

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  1. ^ a b "American Airlines Group Overview". American Airlines, Inc. October 2015. Archived from the original on June 6, 2016. Retrieved December 28, 2015.
  2. ^ "American Airlines". ch-aviation. Retrieved May 2, 2024.
  3. ^ "World's largest airline formed as American Airlines and US Airways merge". The Sydney Morning Herald. Fairfax Media. December 10, 2013. Archived from the original on April 21, 2014. Retrieved December 10, 2013.
  4. ^ a b "American Airlines Group Inc. 2023 Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. February 21, 2024. Archived from the original on March 19, 2024. Retrieved March 19, 2024.
  5. ^ "The new American Airlines". Chicago Tribune. Tribune Publishing. December 8, 2013. Archived from the original on December 9, 2013. Retrieved December 8, 2013.
  6. ^ Karp, Gregory (April 8, 2015). "American Airlines, US Airways get FAA approval to fly as one carrier". Chicago Tribune. Tribune Publishing. Archived from the original on July 15, 2015. Retrieved April 8, 2015.
  7. ^ "Fortune 500". Fortune. Archived from the original on August 7, 2020. Retrieved August 21, 2020.
  8. ^ a b c Matt Joyce (January 26, 2012). "US Airways CEO confirms interest in American Airlines". Charlotte Business Journal. Archived from the original on March 27, 2012. Retrieved March 24, 2012.
  9. ^ "American Airlines open to merger, CEO hints". Charlotte Business Journal. March 19, 2012. Archived from the original on September 15, 2013. Retrieved March 24, 2012.
  10. ^ "WSJ: US Airways Considers Merger With American Airlines". NewsOn6.com. Archived from the original on May 15, 2012. Retrieved May 17, 2012.
  11. ^ "3 unions push American Air toward US Airways merger talks". Chicago Tribune. April 22, 2012. Archived from the original on April 21, 2012. Retrieved April 20, 2012.
  12. ^ "Creditor, 'prospective merger partner' US Airways gives support to American exclusivity extension". LeveragedLoan.com. July 15, 2012. Archived from the original on October 6, 2018. Retrieved February 14, 2013.
  13. ^ "American Airlines, US Airways unveil $11 billion merger". Reuters. February 14, 2013. Archived from the original on September 5, 2017. Retrieved May 22, 2019.
  14. ^ Kennedy, Gary (Gary F.) (February 6, 2018). Twelve years of turbulence : the inside story of American Airlines' battle for survival. Maxon, Terry, Staubach, Roger. New York. ISBN 978-1-68261-488-4. OCLC 1030744604.{{cite book}}: CS1 maint: location missing publisher (link)
  15. ^ Harlan, Chico (September 25, 2015). "Landing a mega-merger: The last days of US Airways". The Washington Post. Archived from the original on February 20, 2020. Retrieved April 2, 2017.
  16. ^ Koenig, David (February 19, 2013). "American Airlines' CEO to get $20 million severance". USA Today. Archived from the original on February 20, 2013. Retrieved February 21, 2013.
  17. ^ "American Airlines, US Airways unveil $11 billion merger". Reuters. February 14, 2013. Archived from the original on December 9, 2015. Retrieved February 14, 2013.
  18. ^ "American Airlines and US Airways to Create a Premier Global Carrier—The New American Airlines" (Press release). Fort Worth, TX & Tempe, AZ: AMR & US Airways Group. February 14, 2013. Archived from the original on February 16, 2013. Retrieved February 14, 2013.
  19. ^ "AA-US Airways Merger Approved, Not CEO Severance". KXAS-TV (NBC DFW). March 27, 2013. Archived from the original on March 29, 2013. Retrieved March 27, 2013.
  20. ^ Jones, Charisse (July 12, 2013). "US Airways shareholders OK American Airlines merger". USA Today. Archived from the original on July 14, 2013. Retrieved July 15, 2013.
  21. ^ Martín, Hugo (December 12, 2013). "American Airlines CEO to get $17-million severance package". Los Angeles Times. Archived from the original on October 18, 2015. Retrieved September 29, 2021.
  22. ^ "American Airlines has no Plan B, will take the antitrust fight to court". The Dallas Morning News. August 20, 2013. Archived from the original on July 1, 2014. Retrieved February 16, 2014.
  23. ^ Evan Perez (August 13, 2013). "US government seeks to block American-US Airways merger". CNN. Archived from the original on June 21, 2017. Retrieved August 13, 2013.
  24. ^ Maxon, Terry (December 11, 2013). "Confirmed: Settlement reached in the American Airlines-US Airways case". Dallas News. Archived from the original on November 14, 2013. Retrieved November 12, 2013.
  25. ^ Had Mouawad; Christopher Drew (November 12, 2013). "Justice Dept. Clears Merger of 2 Airlines". The New York Times. Archived from the original on May 19, 2017. Retrieved March 5, 2017.
  26. ^ Isidore, Chris; Perez, Evan (November 12, 2013). "The Justice Department has reached a settlement with American Airlines and US Airways that requires the airlines to sell facilities at seven airports in order to complete their planned merger". CNN Money. Archived from the original on November 12, 2013. Retrieved November 12, 2013.
  27. ^ American-US Merger Still Faces Private Antitrust Lawsuit Archived December 15, 2013, at the Wayback Machine. Frequent Business Traveler (November 18, 2013). Retrieved December 8, 2013.
  28. ^ Gives Green Light for American Air Exit from Bankruptcy and Merger with US Airways Archived April 26, 2024, at the Wayback Machine. Frequent Business Traveler (November 27, 2013). Retrieved December 8, 2013.
  29. ^ Supreme Court Declines to Block American, US Air Merger Archived December 15, 2013, at the Wayback Machine. Frequent Business Traveler (December 8, 2013). Retrieved December 8, 2013.
  30. ^ Ausick, Paul (November 15, 2013). "Merged U.S. Airways, American Airlines Will List with Nasdaq". 24/7 Wall St. via Yahoo! Finance. Archived from the original on November 16, 2013. Retrieved November 15, 2013.
  31. ^ US Airways fact sheet
  32. ^ Martin, Hugo (December 11, 2013). "American Airlines CEO to get $17-million severance package". Los Angeles Times. Archived from the original on October 18, 2015. Retrieved August 22, 2020.
  33. ^ Beewax, Marilyn (October 16, 2015). "As Airline Megamergers Wrap Up, US Airways Flies Into History". NPR. Archived from the original on September 11, 2018. Retrieved October 17, 2015.
  34. ^ "American Airlines unveils $7.5 billion debt sale to repay government loans". Reuters. March 8, 2021. Archived from the original on March 9, 2021. Retrieved March 8, 2021.
  35. ^ a b c d e "Annual Report and Accounts 2019". WSJ. Archived from the original on August 13, 2020. Retrieved August 21, 2020.
  36. ^ "American Airlines - Financial Results". AA. Retrieved September 5, 2024.
  37. ^ a b "Form 10-K Annual Report American Airlines Group Inc. Year Ended December 31, 2015". American Airlines Group. Archived from the original on April 21, 2022. Retrieved August 22, 2020.
  38. ^ a b c "Number of passengers enplaned by American Airlines from FY 2014 to FY 2020". statista. Archived from the original on November 1, 2021. Retrieved November 1, 2021.
  39. ^ a b "American Airlines Group Inc. Condensed Consolidated Statements of Operations 2019" (PDF). WSJ. Archived (PDF) from the original on May 25, 2020. Retrieved August 21, 2020.
  40. ^ "10-K American Airlines Group". Profitdent. Archived from the original on May 26, 2021. Retrieved May 26, 2021.
  41. ^ "American Airlines Group Inc. 2021 Annual Report (Form 10-K)". February 22, 2022. Archived from the original on March 21, 2023. Retrieved April 5, 2024.
  42. ^ "American Airlines Group Inc. 2022 Annual Report (Form 10-K)". February 22, 2023. Archived from the original on April 5, 2024. Retrieved April 5, 2024.
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  • American Airlines Group at American Airlines website
  • Business data for American Airlines Group Inc.:
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