American Airlines Group

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American Airlines Group, Inc.
Type Public
Traded as NASDAQAAL
Industry Aviation
Predecessor(s) AMR Corporation
US Airways Group
Founded December 9, 2013 (2013-12-09)
Headquarters Fort Worth, Texas, United States
Number of locations More than 330 destinations;[1] hubs in Charlotte, Chicago-O'Hare, Dallas/Fort Worth, Los Angeles, Miami, New York-JFK, Philadelphia, Phoenix and Washington-National
Area served Worldwide (more than 50 countries)[1]
Key people Doug Parker (CEO)
Scott Kirby (President)
Services Air transportation
Revenue Increase US$ 26.743 billion (2013)[2]
Operating income Increase US$ 1.399 billion (2013)[2]
Net income Increase US$ -1.834 billion (2013)[2]
Total assets Increase US$ 14.323 billion (2013)[2]
Total equity Increase US$ -2.731 billion (2013)[2]
Employees 110,400 (Dec 2013)[2]
Subsidiaries Airlines:
American Airlines
Envoy Air
US Airways
Piedmont Airlines
PSA Airlines

Mainline Air brands :
US Airways Shuttle

Regional Air brands:
American Eagle
American Connection
US Airways Express
Website www.aa.com

American Airlines Group, Inc. is a publicly traded airline holding company headquartered in Fort Worth, Texas. It was formed by the December 9, 2013 merger of AMR Corporation, the parent company of American Airlines, and US Airways Group, the parent company of US Airways.[3] The airline groups together form the largest airline in the world, with more than 6,700 daily flights to 336 locations in 56 countries worldwide, about $40 billion in operating revenue, over 100,000 employees, and plans to take delivery of 607 new aircraft, including 517 narrowbody aircraft and 90 widebody international aircraft.[4] The integration of American Airlines and US Airways under a single operating certificate is expected to be completed in late 2015.[1]

Merger between AMR and US[edit]

In January 2012, US Airways Group, the parent company of US Airways, expressed interest in taking over AMR Corporation, the parent company of American Airlines.[4] In March, AMR's CEO Tom Horton said that the company was open to a merger.[5] US Airways (US) told some American Airlines (AA) creditors that merging the two carriers could yield more than $1.5 billion a year in added revenue and cost savings.[6] On April 20, American Airlines' three unions said they supported a proposed merger between the two airlines.[7] Under Chapter 11 bankruptcy protection, American Airlines had been looking to merge with another airline. Earlier in July, a bankruptcy court filing stated that US Airways was an American Airlines creditor and "prospective merger partner"; on August 31, US Airways CEO Doug Parker announced that American Airlines and US Airways had signed a nondisclosure agreement, in which they would discuss the possibility of a merger.[8]

In February 2013, American Airlines and US Airways announced plans to merge, creating, by some measurements, the largest airline in the world. In the deal, which was expected to close in the third quarter of 2013, stakeholders of AMR would own 72% of the company and US Airways shareholders would own the remaining 28%. The combined airline will carry the American Airlines name and branding; the holding company will be renamed American Airlines Group Inc.[9] The US Airways' management team, including CEO Doug Parker, will retain most operational management positions. The headquarters for the new airline will also be consolidated at American's current headquarters in Fort Worth, Texas.[10][11] US Airways will exit Star Alliance upon completion of the merger, and American will retain its Oneworld alliance. Judge Sean Lane approved the merger on March 27, 2013, but declined to approve a proposed $20 million severance package to AA executive Thomas W. Horton.[12] On July 12, US Airways shareholders approved the proposed merger.[13]

On August 13, 2013, the United States Department of Justice along with attorneys general from the District of Columbia, Arizona (headquarters of US Airways), Florida, Pennsylvania, Tennessee, Texas (headquarters of American Airlines),[14] and Virginia filed a lawsuit seeking to block the merger, arguing that it would mean less competition and higher prices. American Airlines and US Airways both said that they would fight against the lawsuit and defend their merger.[15] In early October 2013, the District Attorney of Texas quit the anti-trust lawsuit.

The Department of Justice announced that a settlement of its lawsuit was reached on November 12, 2013. The settlement will require the merged airline to give up landing slots or gates in 7 major airports.[16] Under the deal, the new American is required to sell 104 slots at Ronald Reagan Washington National Airport and 34 slots at LaGuardia Airport. An additional requirement is that American sell two gates at O'Hare International Airport, Los Angeles International Airport, Logan International Airport, Dallas Love Field and Miami International Airport.[17] Some of the slots will be sold to low-cost carriers such as JetBlue and Southwest Airlines.[18]

A private antitrust suit, filed by a group of 40 passengers and travel agents, also sought to block the merger.[19] American's bankruptcy court judge refused to enjoin the two airlines from merging, saying that the group did not demonstrate that the merger would irreparably harm them.[20] The plaintiffs' lawyer appealed and was turned down at the U.S. District Court level and was further rebuffed at the Supreme Court after Justice Ruth Bader Ginsburg denied a stay request filed by him.[21]

Following the Department of Justice approval, US Airways and AMR announced that the merged company will trade on the NASDAQ stock exchange under the symbol AAL.[22][23]

Combined fleet[edit]

Mainline[edit]

As of April 2014, the American Airlines fleet consists of 627 aircraft an average age of 14.7 years,[24][25] while the US Airways fleet consists of 341 aircraft with an average age of 12.1 years.[26][27][28]

After retiring its last Airbus A300 aircraft in 2009, American Airlines operated an all-Boeing fleet (including aircraft produced by McDonnell Douglas before it merged with Boeing in 1997), until the first Airbus A319 aircraft entered the fleet in July 2013.[29]

By the end of 2014, US Airways will maintain a nearly all-Airbus fleet, with the exception of some Boeing aircraft and a small fleet of Embraer jets. Most, if not all, of the airline's remaining Boeing jets are due for retirement near the end of the decade. These non-Airbus aircraft were being retained due to the union's minimum fleet size requirement.

With the post-merger with American Airlines, the combined airline will continue to operate the largest fleet of Airbus aircraft in the world.

All airframes will be transferred to American Airlines once a Single Operating Certificate is awarded by the Federal Aviation Administration.

American Airlines + US Airways fleet[30]
Aircraft Airline In Service Orders Passengers Notes
F J W Y Total
Airbus A319-100 US
AA
93
16
7
49
12
8


18
112
102
124
128
Airbus A320-200 US 68 2 12 138 150
Airbus A321-200
Transcontinental
AA 17 64[31] 10 20 36 36 102
Airbus A321-200 US 94 16 171 187
AA 16 33 132 181
Airbus A321neo AA 100[32]
TBA
Ordered by American Airlines. Deliveries begin 2017.
Airbus A330-200 US 16 20 238 258
Airbus A330-300 US 9 28 263 291
Airbus A350-900 US 22[33] 36 294 330 Ordered by US Airways. Deliveries begin 2017.
Boeing 737-400 US 5 12 132 144 Last Flight: August 18, 2014.[34]
Boeing 737-800 AA 248 57 16 48 86 150 All 150 seat aircraft are to be converted to 166 seats[citation needed]
16 48 96 160
16 54 96 166
Boeing 737 MAX 8 AA 100[35]
TBA
Ordered by American Airlines. To be delivered in 2018-2020
Boeing 757-200
Domestic
US 9 14 176 190 Phasing out beginning in 2014.
AA 68 22 166 188
24 52 108 184
Boeing 757-200
International
US
AA
15
18

12
16

164
166
176
182
Phasing out beginning in 2018.
Boeing 767-200ER US 9 18 186 204 To be retired.[citation needed]
Boeing 767-300ER AA 60 30 195 225 Half being phased out. Other half being retrofitted with new staggered business class and main cabin extra.
28 14 163 205
Boeing 777-200ER AA 47 16 37 194 247 To retrofitted with new Reverse Herringbone seats with half forward-half backward business class and main cabin extra. To be completed by the end of 2014 (targeted).
45 45 170 260
Boeing 777-300ER AA 12 8[36] 8 52 30 220 310
Boeing 787-8 AA 16[35]
TBA
Ordered by American Airlines. Deliveries from 2014.[37]
Boeing 787-9 AA 26[35]
TBA
Ordered by American Airlines. Deliveries from 2014.[37]
McDonnell Douglas MD-82 AA 89 16 124 140 To be phased out by 2018.
16 30 94 124
McDonnell Douglas MD-83 AA 50 16 124 140 To be phased out by 2018.
16 30 94 140
Embraer 190 US 20 11 88 99
Total 955 481

American Eagle[edit]

American Eagle is the regional marketing brand of American Airlines. Currently, four airlines fly as American Eagle, with Chautauqua operating as American Connection. Chautauqua's last scheduled flight with American Connection is on August 18, 2014, after which the airline will no longer fly on behalf of American. Envoy Air, a wholly owned subsidiary of American Airlines was previously known as American Eagle Airlines prior to the merger with US Airways. PSA Airlines, a wholly owned subsidiary of US Airways and an operator for US Airways Express, will operate 30 new CRJ-900 aircraft in American Eagle livery starting Spring 2014. As of May 20, 2014, PSA has taken delivery of one CRJ-900. On May 19, 2014, Mesa Airlines agreed to add another six Bombardier CRJ-900 regional jets to its fleet, and operate them as American Eagle.

The table below shows the combined fleet for airlines operating at American Eagle and those operating as US Airways Express. All US Airways Express operated aircraft will eventually operate as American Eagle when AA and US operate on a single certificate. The column "Operating as" in the table below specifies which regional brand the aircraft are currently operated under.

American Eagle
Airline IATA Service ICAO Code Callsign Aircraft In fleet Orders Operating as Passengers Parent
F Y Total
Air Wisconsin ZW AWI Wisconsin Bombardier CRJ-200 71 US Airways Express 0 50 50 CJT Holdings
Chautauqua Airlines RP CHQ Chautauqua Embraer ERJ-140 14 American Connection 0 44 44 Republic Airways Holdings
Compass Airlines[38] CP CPZ Compass Embraer E-175 20 American Eagle 12 64 76 Trans States Holdings
Envoy Air MQ ENY Envoy Bombardier CRJ700
Embraer ERJ-140
Embraer ERJ-145
47
59
118
American Eagle 9
0
0
54/56
44
50
63/65
44
50
American Airlines Group
ExpressJet EV ASQ Acey Bombardier CRJ-200 11 American Eagle 0 50 50 SkyWest, Inc.
Mesa Airlines[39] YV ASH Air Shuttle Bombardier CRJ-900 49 6 US Airways Express 9 70 79 Mesa Air Group
Piedmont Airlines US PDT Piedmont DeHavilland Canada Dash 8-100
DeHavilland Canada Dash 8-300
27
11

US Airways Express 0
0
37
50
37
50
American Airlines Group
PSA Airlines US JIA BlueStreak Bombardier CRJ-200
Bombardier CRJ-701
Bombardier CRJ-900
35
14
3[40]


27
US Airways Express
US Airways Express
American Eagle
0
9
12
50
58
64
50
67
76
American Airlines Group
Republic Airlines[41] YX RPA Brickyard Embraer E-170
Embraer E-175
Embraer E-175
20
38
29


26
US Airways Express
US Airways Express
American Eagle
9
8
12
60
72
64
69
80
76
Republic Airways Holdings
SkyWest Airlines OO SKW SkyWest Bombardier CRJ-200
Bombardier CRJ-200
Bombardier CRJ-900
12
11
4


American Eagle
US Airways Express
US Airways Express
0
0
9
50
50
67
50
50
76
SkyWest, Inc.
Trans States Airlines AX LOF Waterski Embraer ERJ-145 3 US Airways Express 0 50 50 Trans States Holdings
TBA Embraer E-175 40 American Eagle 12 64 76 Airline TBA
Total 574 122

Livery[edit]

In January 2013, American launched a new rebranding and marketing campaign dubbed, "A New American". In addition to a new logo, American Airlines introduced a new livery for all aircraft in the fleet. The airline calls the new livery and branding "a clean and modern update". The current design features an abstract American flag on the tail, along with a silver-painted fuselage, as a throw-back to the old livery. The new design was painted by Leading Edge Aviation Services in California.[42]

Starting in January 2014, following the merger of US Airways with American Airlines, all US Airways aircraft will be progressively painted in American Airlines livery. The first legacy US Airways aircraft to re-enter revenue service was an Airbus A319, tail number N700UW, which previously sported a Star Alliance branding.[43]

Heritage Liveries[edit]

On December 16, 2013, Doug Parker, the CEO of American Airlines Group announced that TWA heritage aircraft will be added in the future “We will continue that tradition at American, including introducing a TWA aircraft in the future and keeping a US Airways livery aircraft. That also means we will keep a heritage American livery in the fleet”.

Hub network[edit]

When completed, the merged airline will have the following hubs:[44]

Proposed hubs of combined airline - sorted by number of daily flights
Airport Destinations Daily flights[4] Hub airline before merger Share AA Share US Share AA+US [45]
Dallas, TX - DFW 172 877 American 67% 7% 74%
Charlotte, NC - CLT 131 665 US Airways 7% 63% 70%
Chicago, IL - ORD 113 522 American 36% 7% 43%
Philadelphia, PA - PHL 107 469 US Airways 5% 49% 54%
Phoenix, AZ - PHX 74 316 US Airways 5% 27% 32%
Miami, FL - MIA 109 310 American 66% 6% 72%
Washington, DC - DCA 75 292 US Airways 15% 34% 49%
Los Angeles, CA - LAX 44 180 American 18% 5% 23%
New York, NY - JFK 50 97 American 15% 3% 18%
American Airlines' and US Airways' top 10 2013 December airport departures[46]
Rank Airport Flights
1 Dallas/Fort Worth, Texas 834
2 Charlotte, North Carolina 526
3 Miami, Florida 490
4 Chicago-O'Hare, Illinois 322
5 Philadelphia, Pennsylvania 277
6 Los Angeles, California 180
7 New York-LaGuardia, New York 180
8 Washington, DC (Arlington, Virginia) 176
9 New York-JFK 157
10 Boston 120

Share figures in the table above indicate the percentage of total domestic passengers at each airport.

A key part of the government's objection to the proposed merger is the combined share of takeoff and landing slots at slot-controlled airports that are existing hubs for either American Airlines or US Airways. Slot-controlled airports have restricted access for new airline entrants or expanded service by competitive airlines. The table below shows the share of total takeoff/landing slots for each airline at slot-controlled airports:[47]

Slot holdings of key airlines at slot-controlled airports (February 2012)
Airport American Airlines % US Airways % AA + US % United Airlines % Delta Air Lines % Other %
Washington DC (DCA) 14% 54% 68% 9% 12% 11%
NY LaGuardia (LGA) 22% 11% 33% 5% 46% 16%
New York JFK (JFK) 18% 1% 19% 4% 40% 36%
Newark Liberty (EWR) 5% 3% 8% 81% 6% 6%

References[edit]

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  2. ^ a b c d e f American Airlines Group Inc. Form 10-K, Securities and Exchange Commission, February 28, 2014
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  12. ^ "AA-US Airways Merger Approved, Not CEO Severance". WDFW TV. Retrieved March 27, 2013. 
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  15. ^ Evan Perez (August 13, 2013). "US government seeks to block American-US Airways merger". CNN. 
  16. ^ Maxon, Terry (December 11, 2013). "Confirmed: Settlement reached in the American Airlines-US Airways case". Dallas News. Retrieved November 12, 2013. 
  17. ^ Had Mouawad; Christopher Drew (November 12, 2013). "Justice Dept. Clears Merger of 2 Airlines". The New York Times. 
  18. ^ Isidore, Chris; Perez, Evan (November 12, 2013). "The Justice Department has reached a settlement with American Airlines and US Airways that requires the airlines to sell facilities at seven airports in order to complete their planned merger". CNN Money. Retrieved November 12, 2013. 
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  23. ^ US Airways fact sheet
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  30. ^ AAL factsheet feb 2014
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  34. ^ http://airlineroute.net/2014/04/22/us-734-aug14update1/
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  37. ^ a b Jacobs, Karen (January 15, 2013). "American Airlines firms up orders for 787, 737 MAX". Reuters. Retrieved July 22, 2013. 
  38. ^ http://finance.yahoo.com/news/compass-airlines-selected-operate-20-163000870.html
  39. ^ http://finance.yahoo.com/news/mesa-air-group-expand-partnership-183300880.html
  40. ^ http://www.ch-aviation.com/portal/news/29233-psa-to-start-crj-900-operations-for-us-airways-by-end-of-month
  41. ^ American, Republic ink deal for large regional jets. USA Today. (January 24, 2013). Retrieved August 16, 2013.
  42. ^ Ahles, Andrea. "Star-Telegram 18 January 2013: "American Airlines shows off new look for new era"". Star-telegram.com. Retrieved January 29, 2014. 
  43. ^ First US Airways Aircraft Takes to the Skies in American Airlines Livery
  44. ^ "Home". Aa.com. Retrieved March 20, 2013. 
  45. ^ "GAO, Issues Raised by the Proposed Merger of American Airlines and US Airways, June 19, 2013, Table 6 (share of total domestic passengers at each hub airport)". Retrieved September 18, 2013. 
  46. ^ "Flight Stats". anonymous. December 13, 2013. 
  47. ^ GAO: Issues Raised by the Proposed Merger of American Airlines and US Airways, June 19, 2013, Table 7: : Slot Holdings of American and US Airways at Slot-Controlled Airports (February 2012). Retrieved September 18, 2013. http://www.gao.gov/assets/660/655314.pdf