New American Airlines emerges as deal closes

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by David Koenig, AP Airlines Writer and azfamily.com

Video report by Jill Galus

Posted on December 9, 2013 at 6:47 AM

Updated Wednesday, Dec 11 at 3:22 PM

TEMPE and DALLAS -- American Airlines has emerged from bankruptcy protection and US Airways culminated its long pursuit of a merger partner after the two completed their deal Monday to create the world's biggest airline.

The merger survived a challenge from the government and criticism from consumer groups, who fear it will lead to higher prices. It's the latest in a series of mergers that will leave four airlines controlling more than 80 percent of the U.S. air-travel market and with more power than ever to limit seats and boost profits.

American emerges from bankruptcy as American Airlines Group Inc. It will mark a monumental victory for CEO Doug Parker and his executive team at smaller US Airways, who convinced American's creditors that a merger made more sense than letting American remain an independent company.

Plans call for Parker to mark the day by ringing the opening bell on the Nasdaq Stock Market, where the new company will debut under the ticker symbol AAL. Parker's team will spend the next two years or longer combining the two carriers.

Few immediate changes will be apparent to travelers.

"This is especially important throughout the busy holiday travel season, as our first priority will be delivering a superior operation for customers of both airlines," American Airlines President Scott Kirby wrote on USAirways.com. "There is no impact to any existing travel reservations you may have with American Airlines or US Airways at this time, and any mileage balance or elite status you have earned in either frequent flyer [sic] program is completely safe."

While the airlines will operate separately for the immediate future, benefits like the ability to earn and redeem frequent-flier miles on both airlines and reciprocal lounge access will launch in early January.

As the two carriers merge their operations in the coming months and years, the American Airlines name will live on, while US Airways will join Continental, Northwest and other airlines that now exist only in the memories of employees and longtime travelers.

US Airways, which is headquartered in Tempe, says most of its more than 8,000 employees -- pilots, flights attendants, mechanics and other airport-based employees -- will still have jobs after the merger.

"Our networks are being stitched together," American Airlines spokesman John McDonald said. "They don't have much overlap so there's very little impact from that perspective whatsoever."

At the corporate level, it's another story.

"I don't think we've come up with any specific number [of people who will lose their jobs], obviously," McDonald explained. "We don't need two CEOs. We don't need two corporate spokespeople. When you get to the upper echelons of the company, that's where you see the redundancy. We're going to make that be one organization, one group of people."

While the corporate headquarter of the New American will be in Dallas, there will still be a significant presence in the Valley for quite some time.

McDonald said there is a five-year lease on the US Airways building, as well as an option to extend.

"This building will be here for a long time, filled with people who at the airline," he said.

It is expected that Phoenix will remain a hub for the newly created airline for the next three years.

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