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American Airlines: Merger with US Airways would build on success

American Airlines, the aviation giant based in Texas, said that it was doing well on its own but still needed to combine forces with fellow airline US Airways. American's announcement of new routes and a record quarterly profit led some to ask if these kinds of mergers were necessary for a carrier doing so well on its own. The airline's CEO said that his company had been very successful, but a merger with US Airways would give it a stronger network and make it more competitive globally.

American's CEO said that the company had shown it was able to reorganize successfully through a bankruptcy. He added that there were naysayers who doubted they could but that the hard work of the airline's employees over the past few years had made it happen. American netted a profit of $530 million for the quarter that reflected a rise in revenue of 6.2 percent to $6.8 billion, which set a new company record for quarterly revenue. Including one-time reorganization costs, the airline's quarterly profit was $289 million. For the same quarter a year earlier, American lost $238 million.

Regarding the potential merger with US Airways, the CEO of American said that they would be willing to sit down with the Texas attorney general to find a sensible and common settlement with the Department of Justice, which had tried to block the merger. The attorney general of Texas had originally opposed the deal but later came to support it.

Complex business transaction such as mergers and acquisitions may frequently be executed more efficiently with the help of a lawyer. An attorney based in Houston who understands the needs of clients doing business in Texas might be instrumental in aiding companies interested in acquiring a new business.

Source: The Street, "American Is Doing Great But US Airways Merger Still Needed, CEO Says", Ted Reed, October 18, 2013

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