American, US Airways extend date for merger

Posted Tuesday, Sep. 24, 2013  comments  Print Reprints
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American Airlines and US Airways have agreed to extend their merger agreement by a month as the two carriers wait for the result of an antitrust suit filed by the U.S. Department of Justice.

American also removed a proposed $20 million severance package for chief executive Tom Horton from the merger agreement, according to a Securities and Exchange Commission filing made Monday. After a bankruptcy judge declined to approve the severance as part of the company’s reorganization plan, American said Horton would ask the airline’s board of directors to remove the compensation request from the agreement.

In a joint statement issued on Monday morning, American and US Airways said they remain committed to completing the merger, announced in February, that would create the world’s biggest airline. The companies agreed to extend the date at which either company may terminate the agreement from Dec. 17 to Jan. 18, 2014, to give enough time for an antitrust trial to be completed. The trial is set to begin on Nov. 25 in a federal district court in Washington, D.C.

“Our focus is on mounting a vigorous defense and winning our court case so the new American can enhance competition, provide better service to our customers and create more opportunities for our employees,” Horton and US Airways chief executive Doug Parker said in the joint statement.

If the judge rules in favor of the carriers, the earliest either airline could walk away from the deal is Jan. 18. However, if the court does not rule in their favor, American or US Airways can terminate the merger five days after the court enters a final order stopping the merger.

American’s parent company, AMR Corp., also said Monday it will present its amended merger agreement and restructuring plan to the bankruptcy court on Sept. 30 at noon for the court’s approval. U.S. Bankruptcy Judge Sean Lane had previously approved the restructuring plan but had not approved Horton’s compensation package. Objections to AMR’s amended plan are due to the court 30 minutes prior to the carrier’s Sept. 30 presentation.

Andrea Ahles, 817-390-7631 Twitter: @Sky_Talk

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