Top Carriers Weigh American Airlines Merger

US Airways, Delta in the running
By Matt Cantor,  Newser Staff
Posted Jan 13, 2012 8:18 AM CST

(Newser) – Fellow airlines and a private-equity firm are considering buying American Airlines' parent company, which filed for bankruptcy just months ago. Though AMR has struggled in recent years—American hasn't turned a profit since 2007—its decades-old airline holds the No. 3 position among US carriers by traffic. A merger with Delta or US Airways would further shrink the number of major national airlines: There are currently just five, about a third of the number that existed some 20 years ago, the Wall Street Journal reports.

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A Delta-American merger would return Delta to the No. 1 spot by traffic, giving it control of 27% of the market. The smaller US Airways, for its part, may seek the opportunity to beef up its foreign operations and secure some hubs in major US cities. But the process, closely monitored by regulators, wouldn't be easy. The deal would need the OK of a bankruptcy judge and would face plenty of antitrust scrutiny—and creditors and pilots' labor unions would certainly weigh in. The company would need to slice both labor costs and unneeded aircraft in an overhaul that could take more than 18 months, insiders tell the Journal. Sources close to the discussions say bids won't likely emerge for many months. (Read more American Airlines stories.)

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