US Airways shareholders approve merger with American

Posted Friday, Jul. 12, 2013  comments  Print Reprints
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US Airways shareholders overwhelmingly approved the carrier’s merger with American Airlines’ parent company, AMR Corp., on Friday morning.

The formal part of US Airways’ shareholder meeting in New York lasted about 15 minutes. The merger proposal was approved by a 99.6 percent of the shares that were voted.

“It creates an important, strong competitor to United, Delta and Southwest,” chief executive Doug Parker said prior to the shareholder vote. “We will create a premier global airline.”

The merger, an all-stock deal valued at $11 billion, is the latest in the industry’s continued consolidation. Delta Air Lines and Northwest merged in 2008, United and Continental merged in 2010, and Southwest Airlines acquired AirTran in 2011.

With the shareholder approval, the merger of American and US Airways is one step closer to completion. The deal still needs approval from the Justice Department. AMR creditors are also currently considering the merger proposal as part of American’s restructuring plan to emerge from bankruptcy protection.

“We’re pleased US Airways shareholders voted to approve the merger agreement with American, representing continued progress on our path toward building the world’s leading airline,” said American spokesman Mike Trevino in a prepared statement.

Parker, who will be the new chief executive of the combined carrier, told shareholders he does not expect any delay in gaining antitrust approval from the U.S. Department of Justice, despite suggestions that the merged carrier be forced to divest landing slots at Reagan National Airport in Washington. He said that Dallas-based Southwest Airlines and JetBlue were lobbying the hardest on the issue.

He said there is no legal basis to force American and US Airways to divest slots at Reagan, saying that the carriers combined share of flights would still be less than United, Delta and Southwest maintain at other airports.

Divesting slots would result in lost service from Washington to several smaller cities, Parker said, calling that “really bad policy.” He said he expects the merger deal to close in September.

The deal gives 72 percent of the equity, or ownership, in the new company to AMR creditors and shareholders, and 28 percent to US Airways shareholders. Shares of US Airways (ticker: LCC) closed at $17.56 on Friday, up 19 cents, while AMR’s shares (ticker: AAMRQ) rose 13 cents to $4.98.

Outside the meeting, several dozen workers from airport subcontractors for US Airways and American Airlines protested low wages, carrying signs that read: “Poverty doesn’t fly.” They are trying to organize unions and join the Service Employees International.

Inside, four workers who provide wheelchair service and security at airports in Philadelphia, New York, Fort Lauderdale and Boston spoke at the meeting, telling Parker that they make $7 to $8.50 an hour and have gone without raises for years. They spoke of trying to raise families on poverty-level paychecks and having to work two jobs to make ends meet.

Parker said he was proud to have the support of union employees at US Airways and American for the merger and that there was little he could do directly for the workers since they don’t work for US Airways.

“We fully support your right to organize and we wish you luck in that endeavor,” he said.

Addressing the issue of combining the two carriers, Parker said that while the corporate culture among top executives was different at American and US Airways, the culture among most employees is very similar. Both want to operate a great airline and serve customers.

Integration meetings with employees from both airlines have been going well, Parker said, and it’s sometimes hard to tell which airline employees are from.

He declined to say how many management jobs may be lost in the integration or how many headquarters employees would be moving to Dallas-Fort Worth, but said more officers would be named in the next couple of weeks.

Andrea Ahles, 817-390-7631 Twitter: @Sky_Talk Steve Kaskovich, 817-390-7773 Twitter: @stevekasko

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