US Airways Group Inc. shareholders moved the carrier a step closer to an $11 billion merger with AMR Corp.’s American Airlines by approving the combination in a vote today.
The all-stock tie-up, which will create the world’s largest airline, was approved at the company’s annual meeting in New York, US Airways Chief Executive Officer Doug Parker said. Specifics of the vote weren’t immediately provided. US Airways shareholders will own 28 percent of the combined carrier, with 72 percent going to creditors in AMR’s bankruptcy.
The new American will have the heft to compete with United Continental Holdings Inc. and Delta Air Lines Inc., which also were created in a wave of consolidation that began in 2005 and swept up five of the 10 biggest U.S. carriers. The companies expect to complete the merger this quarter, in conjunction with AMR’s exit from bankruptcy protection.
An exchange ratio for shares of Tempe, Arizona-based US Airways in the merger hasn’t been set.
The combination must be approved by the court overseeing AMR’s bankruptcy and by the U.S. Justice Department, which is assessing whether it will create a monopoly in any markets. Federal regulators won’t issue a decision before an Aug. 15 hearing at which Fort Worth, Texas-based AMR will seek court approval for its reorganization plan, people familiar with the matter said last month.
Attorneys general from 18 states have joined the Justice review, and a group of consumers has sued to block the combination in federal court in San Francisco.
The merger will produce annual savings and new revenue totaling more than $1 billion by 2015, the airlines have said. The combined airline will displace United Continental as the largest carrier, based on passenger traffic, and will operate more than 6,700 daily flights.
The new airline will keep American’s name and its Fort Worth headquarters. US Airways executives will hold the top leadership positions. AMR CEO Tom Horton will serve as chairman until the combined airline’s first annual meeting.
US Airways began pursuing a merger with American within months of the larger carrier’s Nov. 29, 2011, bankruptcy filing. After building support for the combination among American’s unions and creditors, the two airlines announced a merger agreement on Feb. 14 this year.
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