Airlines Clear Final Merger

November 28, 2013 by  

Airlines Clear Final Merger, A judge approved American Airlines’ reorganization plan Wednesday, paving the way for the airline’s exit from bankruptcy and clearing the final hurdle to its merger with US Airways to form the world’s largest airline.

The ruling, by Judge Sean H. Lane of US Bankruptcy Court, ends a rocky two-year period for the airline, which sought court protection to reorganize its business, shed debt, and rewrite labor agreements.

A central feature of the reorganization was the merger with US Airways, a prospect that had the backing of American’s creditors and employees. The plan was temporarily disrupted after a challenge by the Justice Department over the summer. Just weeks before the trial wasto start, however, regulators and the airlines settled the suit Nov. 12. The court found the settlement did not modify the plan of reorganization enough to warrant a new vote by creditors and shareholders.

The merged airline, which will keep the name American Airlines, will have 6,700 daily flights, 1,500 airplanes, and about 100,000 employees. Its combined annual revenue will reach about $38 billion.

American was the last of the historic airlines to file for bankruptcy, stumbling from its perch as the nation’s top carrier after falling behind Delta Air Lines and United Airlines.

The American-US Airway merger has been criticized by consumer groups that fear higher airfares and reduced competition.

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