American Airlines-US Airways $11b merger is not expected to have major impact on Logan
The $11 billion merger agreement formally announced Thursday morning between American Airlines and US Airways is not expected to have a major impact at Logan International Airport, where the two airlines don’t overlap on any nonstop routes. Both carriers fly from Boston to New York, but into different airports.
In a move that was widely expected, American Airlines and US Airways said Thursday that they have reached a merger agreement that could create the world’s largest airline.
The company will operate under the American Airlines name and will be based at American’s headquarters in Fort Worth, Texas, with a major presence at the US Airways hub in Phoenix.
Meanwhile, American, the dominant carrier at Logan from 2001 to 2009, is now the airport’s fifth largest carrier, with just over 11 percent of Logan’s traffic. US Airways is the third biggest airline in Boston, serving almost 13 percent of the airport’s passengers. A straight-ahead combination of the two would make it nearly the size of JetBlue Airways, Logan’s largest carrier, which carried a quarter of the airport’s passengers last year.
“The markets that they have will most likely stay,” said Edward Freni, director of aviation for the Massachusetts Port Authority, which runs Logan. The combined frequent flier base could even encourage more travel, Freni noted.
But airlines often trim flights when they merge, and a consolidated US Airways-American Airlines could result in reduced capacity in Boston, said Michael Friedman, a senior analyst at Delaware Investments. But another growing carrier could step into the void.
“The question becomes, how much does JetBlue ramp up because of this?” he said.
US Airways and American are both located in Terminal B at Logan, but their operations are divided by a parking garage. A project is underway to connect the terminal post-security and relocate United Airlines there, which has split operations between the A and C terminals since the merger with Continental Airlines. But with US Airways and American joining forces, the Terminal B renovation may have to be adjusted.
“We have to play musical chairs here at the airport,” Freni said.
American has been restructuring under bankruptcy protection for more than a year, and if the deal is approved by bankruptcy court and antitrust regulators, it is expected to be completed in the third quarter of this year.
Doug Parker, the US Airways chief executive, will run the combined company. American Airlines head Thomas Horton will serve as chairman of the board through the first annual meeting of shareholders, at which time Parker will take over as chairman of the board.
The board will be made up of three representatives from American, four from US Airways, and five from American creditors.
The deal will be an all-stock transaction, with American shareholders owning 72 percent and US Airways stockholders owning 28 percent.
In total, the combined carrier will have 1,500 aircraft, including regional planes, forming the largest fleet in the world, Parker said in a conference call on Thursday.
“Simply put, the new American will provide our customers with the most connected, comfortable flying experience, bar none,” Horton said.Katie Johnston can be reached at firstname.lastname@example.org.