American Airlines Completes Merger With US Airways - Update

(RTTNews) - American Airlines on Monday emerged from bankruptcy and closed its merger with US Airways Group Inc. (LCC) to form the world's biggest airline under the moniker American Airlines Group Inc. (AAL).

The path-breaking merger means that the new American along with few other airlines will control a significant share of the U.S. aviation market.

The new American said that common stockholders of AMR Corp., the former parent of American Airlines, will receive an initial distribution of 0.0665 AAL share for each AMR share held. AMR common shares ceased trading Friday.

Meanwhile, Doug Parker, CEO of the new American, said he expects the merger to provide a return to shareholders, adding that the integration of American Airlines and US Airways will take about 18 to 24 months.

The new American will a robust global network with nearly 6,700 daily flights to more than 330 destinations across the world and will employ over 100,000 people.

The $11 billion merger was agreed upon in mid-February and was expected to close in August, but ran into legal entanglements. The Justice Department and six state attorneys general and the District of Columbia filed a lawsuit, claiming the deal would impair competition.

But soon ensued a settlement between the two airlines and the Justice Department as well as the opposing states, and a bankruptcy court gave its nod to that.

Meanwhile, the new American is expected to benefit consumers as it can take on two merged airlines - Delta Air Lines Inc. (DAL) and United Continental Holdings Inc. (UAL).

As for stakeholdings of the new American, US Airways shareholders will own 28 percent, while the remainder will be held by stakeholders of AMR and its debtor subsidiaries.

AMR was one of the few airlines that averted bankruptcy after the 9/11 attacks and subsequent downturn. However, the company reported losses in the years after, even as peers pruned expenses and returned to profit. But it regained lost ground after cost control measures.