American Airlines could be soaring towards merger
Jeremy Hobson: Well from a company that just entered bankruptcy to a company that’s trying to emerge from bankruptcy. AMR, the parent company of American Airlines, says it is reaching out to other airlines in search of a merger.
For more, let’s bring in Seth Kaplan of Airline Weekly, a publication that covers the industry. He joins us now from Fort Lauderdale. Good morning.
Seth Kaplan: Good morning Jeremy.
Hobson: Well, for a long time, Seth, American Airlines said: you know, we’re going to go through the bankruptcy process and then maybe we’ll think about a merger. Why this change?
Kaplan: American’s management knows that a merger, at this point, is very likely to happen with or without them, and they would rather be in charge of the process. US Airways has been very public about thinking that a combination of US Airways and American would be very good for both airlines. American’s management sees that a lot of its key stakeholders might agree with that, and so they’d rather be the ones picking partners and ultimately in charge of the combined airline.
Hobson: We’ve heard that the unions are on board with a merger — potentially with US Airways. So who does not want to do that on the American Airlines side?
Kaplan: The unions are three votes of what’s basically a nine vote “creditors committee,” it’s called. You can almost think of it a Supreme Court of who runs the airline while it’s in bankruptcy. These are different stakeholders; in addition to the unions you have some bondholders — people who lent the airline a lot of money. You also have a few key suppliers — companies like Boeing, for example.
Certainly there’s enough movement toward a merger that management is concerned that one would happen, and they’re now doing what they can to get those stakeholders back on American management’s side.
Hobson: And quickly, Seth, when do you expect this will all be wrapped up?
Kaplan: Not likely before the end of this year; most likely, at this point, it’ll be a 2013 transaction, whether the airline comes out of bankruptcy on its own or gets together. But these things can change.
Hobson: Seth Kaplan of Airline Weekly, thank you so much.
Kaplan: Thank you.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
