European Commission approves American / US Airways merger

6 Aug 2013 by GrahamSmith
The European Commission has approved plans for a merger between American Airlines and US Airways. The proposed $11 billion deal was last month approved by US Airways shareholders. It now has to be cleared by the US Department of Justice, which is reviewing whether the merger will impact on competition in the aviation market. The EC said it had concerns that the merger would create a monopoly on the route between London and Philadephia route. But the two airlines have agreed to give up one slot at both London Heathrow and Philadelphia when their merger goes ahead. They have also promised to make other "commitments". Joaquin Almunia, EC vice president for competition policy, said: "The commission could clear this transaction in the first phase given the commitments offered by the parties which address the competition concern we identified on the London to Philadelphia route. "The commitments include a corresponding slot at Heathrow as well as far-reaching feeder arrangements to induce entry by a new competitor on the route. "We are therefore satisfied that the competitive dynamics will be maintained so as to ensure choice and quality of air services for passengers on this route." The merged carrier will operate under the American Airlines name, and will be a member of the Oneworld alliance. US Airways is currently a member of Star Alliance. AMR, the parent company of American Airlines, will take a 72 per cent stake in the new company, with US Airways owning 28 per cent. The carrier will be headquartered in Dallas Fort Worth. The team-up is expected to deliver annual synergies of more than US$1 billion by 2015. Graham Smith
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