American Airlines US Airways announces merger (picture)

American Airlines US Airways announces merger (picture) On Wednesday afternoon, American Airlines (American Airlines) announced its merger. Airlin…

On Wednesday afternoon, the boards of directors of American Airlines and US Airways voted to merge the two airlines, which if successful would make the combined airline the world's largest air carrier. Data show that the newly merged company will become the world's largest airline in terms of annual revenue and passenger volume. This is also a major merger move in the aviation industry.

The US$11 billion merger decision was officially announced on Thursday. American Airlines will own 72% of the new company and US Airways will own 28%.

The new American Airlines will have more than 900 aircraft, 3,200 daily flights, and approximately 95,000 employees, not including some regional airline aircraft and employees. That would make American slightly larger than United Airlines.

The merged airline will still be called American Airlines and will be managed by US Airways CEO Doug Parker. It turns out that American Airlines CEO Tom Horton will serve as chairman until the first shareholder meeting in mid-2014.

After this merger, there are currently four major airlines in the United States: the new American Airlines, United Airlines, Delta and Southwest Airlines.

Even if the board agrees to the merger, it would still need to get approval from federal regulators. The federal government will ensure that the merger does not reduce competition in the market. Some analysts say American Airlines and US Airways serve more than a dozen nonstop routes to the same areas, so that's not cause for concern.

The merger will allow American Airlines, which filed for bankruptcy protection in November 2011, to use its scale and advantages after merging with US Airways to better compete with Delta Air Lines and United Airlines.

The merger will allow American Airlines to expand along the East Coast. US Airways has its own bases in Charlotte and Philadelphia, which can help US Airways expand its business across the Atlantic to South America.

This will also be the last wave of integration in the aviation industry. Delta Air Lines and Northwest Airlines joined forces in 2008, United Airlines merged with Continental Airlines in 2010, and Southwest Airlines completed the acquisition of AirTran in 2011.