European regulators approve American-US Airways merger

Published 1:22 pm Monday, August 5, 2013

The European Commission has approved the proposed merger between US Airways and AMR Corp., the parent of American Airlines, removing another obstacle to the deal.

As a condition of its approval, the EC is requiring the new combined carrier to give up one daily take-off and landing slot between London’s Heathrow Airport and Philadelphia. Currently, Tempe, Ariz.-based US Airways operates one daily flight between London and Philadelphia, while American’s Oneworld alliance partner, British Airways, operates two daily flights between the cities.

“The commitments include a corresponding slot at London Heathrow as well as far-reaching feeder arrangements to induce entry by a new competitor on the route,” EC official Joaquin Almunia said in a statement. “We are therefore satisfied that the competitive dynamics will be maintained so as to ensure choice and quality of air services for passengers on this route.”

With clearance from the EC, the merger is awaiting approval from the U.S. Department of Justice as well as confirmation of AMR’s restructuring plan in bankruptcy court. The bankruptcy court is scheduled to take up the matter Aug. 15. And both airlines expect to close the merger by September, when American will exit bankruptcy.

“This represents one of the final milestones on our path to becoming the new American Airlines,” said AMR Chief Executive Tom Horton.

The new combined company, to be called American Airlines Group, will be based in Fort Worth, Texas. Doug Parker, who is chairman and CEO of US Airways, will become chief executive officer, and Horton will become chairman.

“The new American will benefit customers in the United States, Europe and across the world by enhancing connectivity within the Oneworld alliance and creating more options for travel both domestically and internationally,” Parker said.

Separately, US Airways said Monday its consolidated passenger traffic rose 6.3 percent in July as the carrier increased its capacity by 3.0 percent.

Its load factor also grew 1.8 percentage points to 84.7 compared to the same month last year.

“Our July consolidated (mainline and Express) passenger revenue per available seat mile . increased approximately 5 percent versus the same period last year,” said US Airways President Scott Kirby in a statement. “Notwithstanding the operational challenges created by high load factors and difficult summer weather conditions, our 32,000 team members continue to do a tremendous job of taking care of our customers.”