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.
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