US Airways pushes for merger with American Airlines

Hotel News - 05/04/2012

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The Wall Street Journal reports that US Airways Group Inc. has approached some of AMR Corp’s creditors saying that merging the two airlines would produce yields in excess of $1.5 billion (£946 million) annually via cost-savings and added revenues. US Airways has been closely eyeing American Airlines since the company’s bankruptcy announcement last year.

Experts now say that negotiations between the American Airlines parent firm and US Airways may lead to an end to efforts by the former to construct a post-bankruptcy plan with bondholders and labour unions in order to survive as a single carrier.

Meanwhile, analysts also say that US Airways’ push for a merger is complicating AMR’s bankruptcy filing by drawing out the process and creating speculation of the result of what would be a required analysis via anti-trust officials.

The news comes nearly six months after AMR Corp and the third-largest carrier in the US filed for Chapter 11 bankruptcy protection. The firm has since said to shareholders that it continues to seek cost-cutting efforts and a boost in sales in the effort of emerging as a single airline.

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