The world is huge

Don't miss any of it

Travel news, itineraries, and inspiration delivered straight to your inbox.

By proceeding, you agree to our Privacy Policy and Terms of Use.


American Merger: US Airways Ups the Pressure

US Airways’ CEO announced this week that his company might just lose interest in its pursuit of American if it has to wait until American comes out of bankruptcy on its own.

This statement just piles a little more pressure on American’s creditors to force the airline into accepting the US Airways merger bid now, not later. US Airways has played this game skillfully, lining up the support of most of American’s unionized labor force and many key creditors.

We’ve previously reported on the various stakeholders’ positions in this corporate chicken game:

  • US Airways wants an early merger, before American comes out of bankruptcy, because even though it’s the smaller airline, it will clearly emerge as the top dog in a company merged on its terms.
  • American wants to come out of bankruptcy before it merges because it will have much more leverage in any future merger—with US Airways or some other carrier—and its current executives will get some big-buck bonuses.
  • Wall Street wants a merger, no matter what.

The US Airways announcement that it might lose interest is almost surely a bluff. You can bet that it will still want a merger, but the terms would be better now than later. Nevertheless, the bluff still raises the odds that its strategy will succeed.  

You Might Also Like:

We hand-pick everything we recommend and select items through testing and reviews. Some products are sent to us free of charge with no incentive to offer a favorable review. We offer our unbiased opinions and do not accept compensation to review products. All items are in stock and prices are accurate at the time of publication. If you buy something through our links, we may earn a commission.

Top Fares From