American Airlines and US Airways formally announced today that they will merge and form a new combined airline. The joined companies, which will still go by the American Airlines name, “will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion, ” according to a joint press release.
This merger means that there will be fewer options for passengers travelling by plane in the United States. Frequent flyers who want to travel by major airline will have to choose from among Delta Airlines, United Airways, Southwest Airlines, and the new American Airlines. While this lack of competition has caused some to speculate that the price of tickets may increase, there are still smaller economy airline options like Jet Blue, which last year refused a merger with American Airlines.
Although this is a significant change for the airline industry, the deal still needs to be approved by the judge handling American Airlines’ bankruptcy case. It will likely be two years before the companies are fully merged.
