World’s biggest airline

American Airlines and US Airways Group said they plan to merge to form the world’s biggest airline with a combined equity value of $11 billion. The merged airline will be majority owned by creditors, unions and employees of American parent, AMR Corp.,...

American Airlines and US Airways Group said they plan to merge to form the world’s biggest airline with a combined equity value of $11 billion.

The merged airline will be majority owned by creditors, unions and employees of American parent, AMR Corp., which filed for Chapter 11 bankruptcy in November 2011.

The airline would be two per cent larger than current No. 1 United Continental Holdings Inc. in traffic, as measured by the number of miles flown by paying passengers worldwide.

“By utilising American’s connecting network with penetration into smaller markets, and global alliance revenues, the new company could more effectively raise revenues and reduce costs, while addressing labour integration and capital problems,” Sterne Agee & Leach analyst Jeffrey Kauffman said in a note before the deal was announced yesterday. (Reuters)

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