US Airways Shareholders Approve Merger With American Airlines

The Justice Department and attorneys general from 18 states are still reviewing the deal, as are European Union officials, to see if it would create monopoly service on some routes.

The merger, an all-stock deal that has been valued at $11 billion, is the latest in an industry that has undergone substantial consolidation, leading to the mergers of United and Continental in 2010, Delta Air Lines and Northwest in 2008, and Southwest Airlines with AirTran in 2011.

US Airways said in a statement that more than 99 percent of the shares that were voted on Friday supported the merger. US Airways shareholders will have a 28 percent stake in the combined airline.

American has been in bankruptcy since November 2011, and final approval of the bankruptcy court is also required for the merger. The new airline would keep the American name and remain based in Fort Worth. American’s creditors would own 72 percent of the combined airline.

W. Douglas Parker, the chairman and chief executive of US Airways, said at the annual shareholders’ meeting on Friday that the combined airline would offer more than 6,700 daily flights to 336 destinations in 56 countries. He said it would offer customers more choices as well as provide cost savings for the airlines.

But the Government Accountability Office, a research arm of Congress, said in June that the merger would reduce competition in a far larger number of airports than earlier airline mergers, including the one that created United Continental.

The report found that 1,665 routes between cities would lose one competitor as a result of the merger, affecting more than 53 million passengers. A new competitor would be created in 210 routes, affecting 17.5 million passengers. The report added, however, that the great majority of those markets still had “effective competitors.”

Article source: http://www.nytimes.com/2013/07/13/business/us-airways-shareholders-approve-merger-with-american-airlines.html?partner=rss&emc=rss