Record flights amid merger rumors

Thursday, 27 Mar, 2012 0

 US-based airlines carried 730 million domestic and international passengers in 2011, the highest total since 2008, according to a new government report, but talk in the industry was also about still another merger.

Airlines flew with an average of 82-87% of all seats filled, another record high “load factor,” according to the US Bureau of Transportation Statistics.

“Combined, the growing passenger numbers and the record domestic load factor demonstrate again that the nation's airlines are enjoying growing demand for air travel, representing a strong rebound from the industry slump during the recession,” according to the LA Times.

Meanwhile, US Airways is looking to take over bankrupt American Airlines, according to several published reports and industry analysts.

The goal is to complete a deal before American’s parent company, AMR, exists bankruptcy proceedings, according to a Bloomberg report.

AMR recently received permission to extend the filing deadline for its reorganization plan until Sept. 28.  The company has said it plans to ask for its labor union contracts to be voided.

US Airways is likely to put forward the argument that the two airlines combined will be stronger than if they remained as separate companies, said Ray Neidl, an aerospace analyst with Maxim Group.

US Airways CEO Doug Parker has made no secret of his desire to join with American, telling reporters this week that advisers have been hired to consider a bid. But during the current bankruptcy period American is barred from filing competing plans, such as a merger proposal.

Meanwhile, US Airways is buying up Internet domain names reflecting a potential merger.

A spokesman for US Airways confirmed that company registered domain addresses that include the names of both airlines, according to The Associated Press. A merger between American and US Airways would give American an improved presence in the East, where it has been squeezed out by Delta and United, said Neidl.

By David Wilkening

 



 

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