Bankruptcy Judge Sean Lane will hold a hearing to review AMR Corp.'s planned merger with US Airways Group Inc. on March 27, while the court's assessment of a contentious plan for AMR's commuter-airline unit has been pushed back two weeks to March 12, the Wall Street Journal reported today. The parent of American Airlines asked Judge Lane for a hearing on the merger in a court document filed yesterday, requesting that any objections be filed by March 15, and the judge acceded to the request.
Almost a dozen large law firms have landed lead advisory roles on the proposed $11 billion merger of American Airlines parent AMR and US Airways Group, according to Am Law Daily on Friday. Thursday's announcement that the two companies have agreed to merge follows months of negotiations that began when US Airways started circling its insolvent rival last year. The AMR bankruptcy, which began when the carrier filed for chapter 11 in November 2011, has already generated millions in legal fees for a variety of firms. AMR alone is paying at least 20 law firms—including the now-defunct Dewey & LeBoeuf—and navigating the looming regulatory approval process is likely to fatten at least some of those firms' coffers even more. Weil, Gotshal & Manges is serving as lead bankruptcy and deal counsel to longtime client AMR through corporate and M&A partners Thomas Roberts and Glenn West—the managing partner of the firm's Dallas office—and business finance and restructuring partners Stephen Karotkin and Alfredo Perez.
The U.S. regional-airline industry could be set for more consolidation in the wake of deal-making among network carriers, according to the head of AMR Corp.'s American Eagle commuter unit, the Wall Street Journal reported on Saturday. A long-planned spinoff of American Eagle also remains a possibility even after the planned merger of American Airlines parent AMR and US Airways Group Inc., though Eagle Chief Executive Dan Garton said that the initial priorities are developing a new aircraft-fleet plan and exploring how the partners' regional operations can be "blended." Regional airlines are the backbone of the U.S. domestic-airline industry, expanding rapidly over the past two decades to account for just over half of all passengers, feeding them to big hubs such as Chicago O'Hare and Dallas-Fort Worth from smaller airports. American Eagle is the largest regional carrier wholly owned by a U.S. network airline, and last year it accounted for 95 percent of the domestic passengers fed onto American's flights.
The deal between American Airlines and US Airways would be the latest in a line of airline mergers that concluded, or shortly followed, a chapter 11 restructuring, the Wall Street Journal reported yesterday. Chapter 11 often paves the way for such deals by giving airlines the legal tools and bargaining power they need to become leaner and more competitive, and thus more appealing as a prospective merger partner. US Airways itself is the product of a bankruptcy merger with American West Airlines nearly a decade ago, and AMR acquired Trans World Airlines from its 2001 bankruptcy case. Delta Air Lines Inc. and Northwest Airlines, which filed for chapter 11 protection on the same day in September 2005 and exited in 2007, announced their merger the following year. And about four years passed between United Airlines' exit from bankruptcy before it launched its merger with Continental, becoming United Continental Holdings Inc. Read more (Subscription required): http://professional.wsj.com/article/SB100014241278873241623045783039539…
In related news, U.S. Senators said yesterday that they will hold a hearing on the antitrust implications of a planned merger between US Airways Group and AMR Corp, the parent of American Airlines. The $11 billion all-stock deal, announced on Thursday, would create the world's largest air carrier. No date has been set for a hearing so far. Read more: http://www.reuters.com/article/2013/02/14/americanairlines-merger-senat…
American Airlines parent AMR Corp. and US Airways Group Inc. announced that their boards have approved a merger deal that would create the world's largest airline, the Wall Street Journal reported today. The companies said they aim to complete the combination by the third quarter of 2013, an ambitious schedule given the integration issues seen in other airline mergers. AMR's creditors would own 72 percent of the combined airline, and US Airways shareholders the balance. The plan is subject to approval from the judge overseeing AMR's bankruptcy, and also requires clearance from antitrust regulators and other agencies. US Airways Chief Executive Doug Parker will run the combined company as chief executive. AMR CEO Tom Horton will serve as nonexecutive board chairman until next year. The new entity—which will have an implied market value of about $11 billion—will retain the American name and brand remain based in its Fort Worth, Texas, headquarters.
Global Aviation Holdings announced that its reorganization plan took effect yesterday, allowing it to finish its financial restructuring and emerge from chapter 11 bankruptcy, the Atlanta Journal-Constitution reported today. Global Aviation, which is the parent company of passenger charter operator North American Airlines and cargo and passenger charter operator World Airways, said that the plan reduces its debt and fleet costs, and includes new labor agreements with most of its unionized work groups. The company also has $35 million in exit financing.
An expected merger agreement this week between AMR Corp.'s American Airlines and US Airways Group Inc. could end the latest chapter on airline consolidation that has helped to stabilize an industry troubled for decades, the Wall Street Journal reported today. The $10 billion-plus deal would follow three other industry megamergers since 2008, a period of consolidation that has produced a healthier industry with the prospects of sustainable profitability and investment-grade credit ratings. Travelers would have fewer airline choices—an AMR-US Airways merger would leave four airlines controlling about 83 percent of domestic seats—but also potentially reap the benefits from greater reliability and higher investment in the airlines. Competition remains intense as discount carriers account for roughly 37 percent of domestic passenger air trips, keeping a lid on price increases. On an inflation-adjusted basis, domestic fares are about 15 percent lower than they were in 2000, according to government data.
The boards of American Airlines parent AMR Corp. and US Airways Group Inc. are prepared to vote on a merger on Feb. 11 as executives and advisers work on final terms this weekend, Bloomberg News reported on Saturday. The sides have agreed that AMR's bankruptcy creditors would get 72 percent of the equity in the new carrier, with 28 percent for US Airways shareholders. US Airways Chief Executive Officer Doug Parker will run the airline as AMR CEO Tom Horton becomes non-executive chairman, according to the report. AMR's creditors committee is poised for a vote early next week on any merger accord, with an announcement as soon as Feb. 12.
The anticipated marriage of American Airlines parent AMR Corp. and US Airways Group Inc. would represent a departure from other airline mergers in recent decades, which had been aimed more at creating a huge route network that leapfrogs the competition, rather than at culling money-losing and overlapping flights, the Wall Street Journal reported today. The prospective deal could restore American, which has suffered billions of dollars of losses in recent years, to its former status as the world's biggest carrier. The new American would have hubs at seven of the nine busiest U.S. airports and boast a strong presence in Europe and Latin America.
American Airlines parent AMR Corp. and US Airways Group Inc. are hashing out the last major details of a merger agreement that would create the world's largest airline and are racing to finalize a deal, the Wall Street Journal reported today. If the deal is reached, the new company could have a market capitalization of more than $10 billion and would vault ahead of United Continental Holdings Inc. as the biggest U.S. airline by traffic. The all-stock deal would be executed as a reorganization plan that takes American out of chapter 11 protection. American has resisted a deal at various points in favor of emerging from bankruptcy protection as an independent airline. Significant points of the deal, including how to split ownership of the airline and how to arrange board seats and management ranks, remain unresolved. The boards of both airlines have not yet convened to consider the deal, although American representatives yesterday discussed whether to schedule such a meeting.
