AMR’s Merger With U.S. Airways Approved by Judge in N.Y.

New York Judge Sean Lane approved the merger of the US Airways and American Airlines (AMR), creating the largest airline in the market. Many of the factors that stymied the merger were issues such as who would take control of the company and in what manner they would continue to play their roles. The merger decided that US Airways C.E.O. Doug Parker will continue to be the C.E.O., while the AMR C.E.O., Tom Horton, will take the role of chairman.

Of note, however, is the request of a $20 million severance package for Horton, which was declined. The U.S. government stepped in to argue against Horton’s “golden parachute,” ensuring that the merger was appropriate. Judge Lane personally thought the deal would greatly benefit stakeholders.

I think that running the largest aircraft carrier is a daunting task alone, but this recent merger is going to introduce even more tasks that need to be resolved to ensure that it can remain profitable. The new American Airlines will be very interesting to watch, as the merger has created an enormous new company that has a very large share of the market. The dynamic between this new company and smaller airlines is something to observe as American Airlines works through the merger process.

 

Written By: Melody Mark

Source:

McLaughlin, David. “AMR’s Merger With US Airways Approved by Judge in N.Y.”Bloomberg. Bloomberg L.P., 27 Mar. 2013. Web. 28 Mar. 2013.

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