American Airlines and US Airways merge to create world’s largest airline group

A merger agreement that would create the world’s largest carrier by passenger numbers has been confirmed by American Airlines and US Airways.

The new entity, which will operate under the American Airlines name, will handle an estimated 160 million passengers per year, and will offer more than 6,700 daily flights to 336 destinations in 56 countries.Thomas Horton, America’s current chairman, president and CEO, will serve as chairman of the new airline; while chairman and CEO of US Airways, Doug Parker, will take on the role of CEO.

Mr Horton said: “We are proud to launch the new American Airlines – a premier global carrier well equipped to compete and win against the best in the world. “The combination of American and US Airways brings together two highly complementary networks with access to the best destinations around the globe and gives us a strong platform to provide our customers the most connected, comfortable travel experience available.

“The operational and financial strength of the combined airline is expected to enable continued investment in new products and technologies and will create exciting new opportunities for our people, even as we deliver strong cash flow and sustainable profitability.”

However, the move has sparked controversy among academics, with some voicing concerns that the merger could negatively impact performance levels. Dr Brent Bowen of Purdue University, Indiana, said the trend towards a handful of small “super airlines” dominating the skies was likely to lead to a decline in performance levels.

Dr Bowen who conducts the annual Airline Quality Rating survey with Wichita State University’s Dr Dean Headley, said that research shows that every major airline merger in recent history has led to “significantly declining” standards in terms of performance, including punctuality, lost luggage and employee satisfaction. Whichever airline you decide to travel with on your holidays this year, remember to take out travel insurance before you go.

Date Created: 20 February 2013

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