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American Airlines merger has a lot of history

It's a wedding announcement on Valentine's Day, brought to you by American Airlines and US Airways. The boards of both carriers have approved a merger. The new airline will be the world's largest, it will be called American Airlines and based in Fort Worth, Texas.

Bob Crandall, former CEO of American Airlines, joins Marketplace Morning Report host Jeremy Hobson to discuss the path to the merger and what's next for the new airline.

On the benefits of the merger:

"The new company, the new American, is going to have a great many more destinations. It will have more hubs across which to interchange traffic. In all respects, it will be a fundamentally enhanced competitor."

On why a merger was necessary for American:

"American didn’t declare bankruptcy when all the other major carriers did, and as a consequence American had much higher costs than those carriers that had gone into bankruptcy, and as a consequence, American, in an effort to keep its costs competitive, stopped flying a lot of flights and stopped serving a lot of destinations."

On why American Airlines and US Airways fit well together:

"What you’ve got today is American, which is a much smaller carrier than it was at one time, and US Airways, which has not had the scale to compete adequately with the others. And so you are putting together two carriers that complement one another, and you’re creating a third major competitor which from the standpoint of consumers is a good idea."

To hear more about what the merger will mean for customers, click on the audio player above.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.
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