American Airlines and USAirways Merger Announcement Likely Thursday
(NEW YORK) -- They've been dating for a year, and now it looks as though the marriage of American Airlines and USAirways will be announced Thursday, according to a source close to the negotiations.
The source tells ABC News that details of the merger agreement have been worked out, but it still needs approval from the two airlines' Boards of Directors. They are meeting to consider the deal.
If the two carriers merge, they are expected to retain the American Airlines name. The new airline would become the largest in the world.
Any deal is still subject to approval of the bankruptcy judge overseeing American Airline's bankruptcy, as well as the anti-trust division of the Department of Justice. Both are expected to sign off on the agreement.
This would be the third mega airline merger in the past five years. Delta and Northwest announced a merger in 2008, followed by United and Continental in 2010. The industry consolidation would leave four major carriers operating in the U.S.: American, Delta, United and low-coast carrier Southwest.
For travelers, nothing will change immediately. These complicated mergers can take more than a year to accomplish. Will this ultimately mean higher fares for travelers? Some analysts believe fares won't be greatly affected, because American and USAirways don't compete now on many of their routes.
One thing travelers won't have to worry about is their coveted frequent flyer miles. The airlines will merge their two frequent flyer programs, and the larger route system will give passengers more opportunity to earn those miles.
Airline mergers can be messy affairs. The biggest problem with most mergers is consolidating employees and employee contracts. In this case, deals have already been worked out with pilots, flight attendants and mechanics, which will help ensure smoother sailing when and if the airlines combine.
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