US Airways shareholders approve merger

2013-07-13T00:00:00Z US Airways shareholders approve mergerThe Associated Press The Associated Press
July 13, 2013 12:00 am  • 

Shareholders of Tempe-based US Airways overwhelmingly approved a proposed merger with American Airlines, bringing the companies closer to creating the world's biggest airline.

The main hurdle now is a review by antitrust regulators at the U.S. Department of Justice. Concerns have been raised about the merger's impact on airfares, and the combined airline's potential dominance at Washington's Reagan National Airport.

The man who will lead the combined company, US Airways CEO Doug Parker, was once again adamant Friday that the combined airline should not be forced to give up any takeoff and landing slots at Reagan National, where it will be by far the biggest carrier.

At Friday's shareholder meeting in New York - likely the last for US Airways Group Inc. - 132.3 million shares were voted in favor of the merger and about 258,000 against it, the company said. The US Airways shareholders will get 28 percent of the new company, with the rest going to creditors, employees and shareholders of American Airlines parent AMR Corp.

AMR has been operating under bankruptcy protection since November 2011, and its creditors are voting through July 29 on a reorganization plan that includes the merger. They are widely expected to favor it, and a federal bankruptcy judge in New York could confirm the plan at an Aug. 15 hearing.

At Thursday's closing price for US Airways shares, the all-stock deal would be worth roughly $12.8 billion. Since American filed for bankruptcy, US Airways shares have nearly quadrupled to $17.37, as investors bet on the merger of the two airlines.

European regulators are expected to announce a decision on the merger this month. The U.S. Justice Department has not commented on its review, but some members of Congress have questioned whether US Airways and American would be too strong at Reagan airport. Together they would control about two-thirds of the takeoff and landing slots at the close-in airport.

Parker said after previous airline mergers, Delta, United and Southwest have even greater domination at airports such as Atlanta, Newark, N.J., and Chicago's Midway Airport.

"So clearly the standard of 67 percent is not an antitrust issue or none of those mergers would have been approved," Parker said.

Critics of the merger worry that it will reduce competition and drive up prices.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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