AIRLINES

Merger official, new American Airlines exits bankruptcy

 

hsampson@MiamiHerald.com

After two years and some significant setbacks, American Airlines left bankruptcy behind Monday and moved forward as the world’s largest air carrier thanks to a merger with onetime rival US Airways.

The deal was all but done last month, when the airlines and U.S. Department of Justice announced the settlement of an antitrust lawsuit filed in August.

But the new airline company, American Airlines Group Inc., saved the celebrations for Monday. Accompanied by company leaders and employees, new CEO Doug Parker rang the Nasdaq opening bell from the airline’s headquarters in Fort Worth.

Miami International Airport, where American Airlines is the main carrier, had its share of parties as well. In a break room at noon Monday, about two dozen employees from American and US Airways gathered for cake and cheers — one of several such gatherings Monday.

“This is a really historic day for all of us,” American Airlines vice president for Miami Marilyn DeVoe told the group.

“It’s an amazing feeling, an accomplishment for the entire team,” said customer care manager Laura Ehrhardt, who has worked for American for 24 years. “We’re certainly looking forward to brighter days ahead.”

Passenger service agent Eddie Garcia, another 24-year American employee, said one of the benefits is welcoming US Airways employees into the fold.

“Now we can say we’re part of the same family,” he said.

That includes Oscar Medina, station manager for US Airways who attended the noon gathering Monday.

“It’s been a long journey,” Medina said. “Today is day one of our new beginning.”

Art Torno, the Coral Gables-based senior vice president for Mexico, the Caribbean and Latin America, said customers won’t notice any changes until the new year. In early January, he said, passengers will be able to earn and use miles on each carrier and use both lounges. After that, the airlines will start to code share on each other’s flights.

In Miami, the combined airline will have more than 10,000 employees and about 350 daily flights, compared to the roughly 340 at the end of this year. Torno said some of those additional flights will be critical, providing connections to destinations throughout the East Coast through US Airways hubs in Charlotte, Philadelphia and Washington, D.C.

American continued to add new flights to and from Miami throughout the restructuring process, Torno said, and will continue to build the hub.

“This merger allows us to evenly compete on a network basis,” he said. “For us, it’s huge, and for Miami, it even strengthens our position more.”

In a statement, Miami-Dade Aviation Director Emilio González said the airport celebrated the formation of the new American Airlines and looked forward to remaining the hub for Latin America and the Caribbean.

“The merger of American Airlines and US Airways puts our hub carrier on stronger financial footing, which is fantastic news for our travelers, employees and business partners at Miami International Airport and throughout our community,” he said.

Torno said the airline wants to bring US Airways operations to the North Terminal, where American is stationed, “as quickly as possible.” In leaving concourse J, the airline will also shed two gates that US Airways used as part of the settlement with the Justice Department.

He emphasized that the airlines will still operate separately for 18 months to two years as they integrate their systems and seek approval from the Federal Aviation Administration for a single operating certificate.

Parker takes over as CEO of the combined airline with some practice in the area: the current US Airways joined with America West Holdings Corp. in 2005. As he seeks $1 billion in new revenue and savings, he plans to smooth technology bumps by using the reservation system at the bigger American and has union accords in place to ensure labor peace and predictable costs.

“They are in a good position,” Savanthi Syth, a Raymond James Financial Inc. analyst, told Bloomberg News. “That’s not to say they won’t have any hiccups, but they have their own merger experience and they’ve watched what’s worked and hasn’t worked for others. They will be a formidable competitor.”

This report was supplemented with information from Bloomberg News.

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