American, US Airways boards OK merger to create world's largest airline

The boards of AMR Corp and US Airways Group Inc separately met today and approved a merger that would value the combined company at around $11 billion, making it the largest airline in the world. [Reuters]


  1. Are you sure fares and services will “only” improve? It will be a huge bureaucracy, full of entitled employees and enormous fixed costs. It almost sounds like a monopoly to me.
    What we need is more competiition, not less.

    1. “It will be a huge bureaucracy, full of entitled employees and enormous fixed costs.”

      Don’t worry, I’m sure that the finest legal eagles available are working overtime as we speak to determine how best to dissolve any existing contractual obligations to employees of both companies and ensure that the post-merger entity owes the little people as little as possible. That sort of thing is SOP for any nontrivial restructuring.

    1.  Speaking as one of the cattle class, who is 74″ tall and about 200 lb. (convert to metric for yourself, I’m too lazy right now), and, who has to fly from Seattle to Tampa in a few days – how am I gonna squeeze in there in the middle seat, with no food, no water, crabby people, and nowhere to put my knees. 
       Scuse me if I don’t care about this merger.

  2. Have to make sure you stay Too Big To Fail in today’s competitive business climate.

    Oh, wait. I didn’t mean competitive at all. I meant the other thing…

  3. Airlines struggle to make a profit with clockwork like consistency.  AMR (American Airlines) just got done declaring bankruptcy a couple of years ago and are still shaky which is  why they are getting nom’d on.  Add on top of that the simply brutal pricing battles spawned by the intertubes, and this gets a big old “meh” from me.  The airlines are not gouging you.  With a few exceptions, they are collecting enough to keep above water.  Whenever the economy implodes, they take it in the shorts with gusto.  Add on top of that a pretty healthy growth in smaller airlines battling it out, and it really just doesn’t top my “to worry about” list.  

    The combined company is worth 11 billion in totality. AT&T makes nearly double that in net profit in a year.  I have vastly more lost sleep over Comecast/NBC merging, or two cell phone carriers.  In a place where competition is bloody, fierce, and people are dipping into bankruptcy  a merger might be a healthy thing.

    1. This merger could also easily turn into a monster money-loser, depending on how the reorg goes, what management is retained, how much the unions howl when they (inevitably) shrink the plane fleet. . .the more I think about it, the more I think the merger between AA and US Airways is a monster Faustian bargain.

  4. Good thing that Teddy Roosevelt’s Trust buster commission is on top of this!

    I just watched the movie Flight last night. SPOILERS!

    After the plane crashes the people who are fighting to find out the results are the pilot union, the insurance companies, the plane manufactures and the owners of the airlines. In a deregulated world the needs of the people for safety fall further and further down the lists after profits. 

    The airline business isn’t especially profitable and “economies of scale” don’t always make a company more profitable, but for something as critical as plane travel, shouldn’t safety be a higher consideration than profit? 

    Do we need a couple of planes to crash because of corners cut on maintenance from a company competing with “too big to fail?”

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