American Airlines, US Airways announce merger

American Airlines parent company AMR Corp and US Airways announced Thursday that their boards have approved a merger agreement to create the largest US airline. The combined company, which will have an implied equity value of approximately $11 billion, will become a fully operating entity following American's pending bankruptcy proceeding, according to a news release. The companies expect the deal to result in combined synergies of more than $1 billion. Following American's emergence from bankruptcy and the execution of the deal, US Airways will hold approximately 28 percent of the company, with American interests holding the rest, the news release said. The deal follows a spate of earlier US airline mergers that have reshaped the sector and improved profitability. The added heft gives American a better chance of competing with fellow airline giants United and Delta in terms of offering more destinations in an efficient manner. "The combined airline will have the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace," said US Airways chief executive Doug Parker. "Our combined network will provide a significantly more attractive offering to customers." The combined airline will offer more than 6,700 daily flights to 336 destinations in 56 countries, the news release said. The new airline will be the largest US airline in terms of revenue. The companies touted the deal for strengthening the combined company's competitive presence in the US Northeast, the western part of the US and Latin America. Some observers have said the deal still leaves American with a relatively weak position in Europe and Asia compared with some competitors.