New American Airlines Faces Long Year of Integration

Dec. 29–FORT WORTH — After a December wedding for American Airlines and US Airways, the honeymoon is over for the new American Airlines Group.

The airlines, which announced their intent to merge on Valentine’s Day this year, closed the deal Dec. 9 with silver bells ringing in celebration at American’s Fort Worth headquarters.

Now comes the difficult task of integrating the two airlines with 100,000 employees and 1,500 aircraft into one, a long and complicated process likely to take two years.

American’s new CEO, Doug Parker, who previously ran US Airways, said the goal is to restore American to its spot atop the industry.

“Being the greatest airline in the world means that we want to be the airline that customers want to fly, where employees want to work and where investors want to invest their dollars,” Parker told employees at the headquarters celebration this month.

The next year will be spent choosing which technology systems to use, instituting employee work rules and deciding which customer policies will remain in place.

For example, American allows pets to fly in the cargo hold while US Airways does not. American also allows unaccompanied minor children to have connecting flights while US Airways will only allow unaccompanied children to fly direct.

“All those different policies, whether it’s carry-on bags or boarding announcements or premium service or clubs, all those kinds of things we have to make decisions on,” American’s Chief Operating Officer Robert Isom said.

Travelers will start seeing changes in January.

Engagement almost derailed

When American and US Airways announced the merger in February, executives knew that it needed approval from a bankruptcy judge.

American, which had been restructuring its troubled finances under Bankruptcy Court protection since November 2011, had several legal hurdles to clear, including persuading creditors to vote for the deal.

What the airlines did not expect was strong opposition from the U.S. government. Three previous airline mergers — Delta/Northwest, United/Continental and Southwest/Airtran — had been approved with no antitrust lawsuits filed by the Justice Department.

But in August, just a few weeks before the airlines hoped to close the deal, the department filed an antitrust complaint to stop the merger, saying it was anti-competitive and would harm consumers.

A trial was set for Thanksgiving week with dozens of expert witnesses scheduled to testify on how the deal would affect the U.S. travel market.

Then, before it started, the two sides settled in early November with American agreeing to divest takeoff and landing slots at New York LaGuardia Airport and Washington D.C.’s Reagan National Airport, as well as gates at several other airports.

“We could have either settled or taken our chances in court and we chose to settle and get it done,” Parker said.

The settlement was approved by U.S. Bankruptcy Judge Sean Lane, and American exited bankruptcy Dec. 9 and closed its merger with US Airways. The new company, American Airlines Group, began trading on the Nasdaq exchange that day under the ticker symbol AAL.

A busy 2014 ahead

Since the airlines joined merged, customers have yet to see many changes. Executives decided to wait until after the busy holiday season before implementing anything new.