American Airlines and US Airways announced Thursday that they'll merge and create the world's biggest airline.
Here are some of the highlights of the deal:
Name That Airline:
The corporate name will be American Airlines Group Inc. Planes will fly under the American Airlines name. It will be based in Fort Worth, Texas.
What It's Worth:
The companies valued the deal at $11 billion, based on US Airways Group Inc.'s closing stock price of $14.66 Wednesday.
Who Gets What:
Creditors of American's parent, AMR Corp., get 72 percent of the company. The remaining 28 percent goes the US Airways shareholders. Included in the creditors' portion is a 23.6 percent state for AMR employees and unions and a 3.5 stake for existing AMR shareholders.
The companies estimate that combined they'll have revenue of $40 billion in 2013. By comparison, analysts surveyed by FactSet expect United Continental Holdings Inc. to report revenue of $38.68 billion, and Delta Air Lines Inc. to post revenue of $37.82 billion this year.
Who's in Charge?
Doug Parker, CEO of US Airways, will run the combined airline. Parker finally succeeded after three failed attempts to merge his mid-size carrier with one of the major airlines. Tom Horton, American's CEO, will stay around for a little more than a year as chairman. Parker takes that title after Horton leaves.
Also, the new board will have 12 directors, including five appointed by American's bankruptcy creditors, three current AMR Corp. directors, and four US Airways directors.
Combined, the airlines have 101 million frequent fliers. Their miles will be safe. After the merger is approved, the two airlines will likely combine the miles into one program and elite status from one airline will likely be honored on the other.
As the biggest U.S. carrier, the new American hopes to compete for more business travelers. Plane orders will give it a young fleet.
It's still third place in Asia behind U.S. competitors United and Delta. Both American and US Airways have had difficult labor relations.
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