AMR, US Airways To Announce Merger

The boards of American Airlines and US Airways have voted on a merger between the two companies. The resulting carrier would be the nation's largest.

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ROBERT SIEGEL, HOST:

It appears the American Airlines and US Airways are going to merge. There are multiple reports that late today the boards of the two companies approved the merger, which will create the country's largest carrier. The deal, if it survives regulators' antitrust review, will allow American to emerge from bankruptcy.

NPR's Wade Goodwyn joins us from Dallas with more on the merger. And Wade, what will the airline be called and what else can you tell us about the makeup of the newly merged company?

WADE GOODWYN, BYLINE: It's going to be called American Airlines. The name US Airways is being tossed into the dustbin of history, say no more. 72 percent of the new carrier will go to American Airlines creditors and other interests, and 28 percent to US Airways shareholders. It's looking like there will be some kind of shared management at the top, with US Airways top managers apparently holding sway, which is fine with American's unions. They would be happy with a complete revamping of American's current management. US Airways CEO Doug Parker will be the new CEO of the new American, and American's CEO, Tom Horton, will become temporary, non-executive chairman. And Horton's title tells you pretty much everything you need to know about the balance of power in this new American Airlines.

SIEGEL: Well, if this new American Airlines is going to be the biggest airline in the country, what will being the largest carrier in the marketplace - how will that affect consumers?

GOODWYN: Well, the first order of business is trying to take these two, at times, dysfunctional airlines and make them into a seamless team of dauntless airline professionals - I kid, of course. But no, these airlines, these big mergers are hard to do. Each company has their way of doing everything, and somebody is going to have to compromise, which doesn't always go over well. You know the book "Who Moved My Cheese?" Well, six tons of cheese gets moved in these mergers and it takes time for employees and managers to get past it and keep a good attitude. Looking at the two airlines on paper, it looks like it works. US Airways brings a lot in the East and Northeast to the table, and American is strong internationally. If everyone worked together it could be a very successful airline.

SIEGEL: It's going to be a very big airline. Will it be hard to get this deal through the antitrust review?

GOODWYN: The short answer is no. It seems clear that the US government is resigned to these big airline mergers; this is number four. And the reason for that is that practically nobody but Southwest and a few other smaller carriers can make any money. So we're going to have fewer carriers, fewer seats, and we'll all pay higher fares. But the end result should be a profitable American airlines industry.

SIEGEL: Well, thank you Wade.

GOODWYN: My pleasure.

SIEGEL: That's NPR's Wade Goodwyn, reporting on the newly approved merger of American Airlines and US Airways. That will form the largest airline in the country.

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