US Airways and American Airlines are looking to get hitched. After getting tacit union approval, CBS News is now reporting that US Airways has filed paperwork with the SEC to begin the process of taking over American Airlines, whose parent company AMR is in the midst of Chapter 11 bankruptcy.
US Airways has actively been courting AA's "creditors and its three major labor unions - as well as lobbying on Capitol Hill," according to reports. No price is out there yet, but considering that AMR lost $1.7 billion in its last quarter it will probably be something of a steal. And maybe good for both?
In discussions with creditors, US Airways has asserted a merger with AMR could reap more than $1.5 billion in additional revenue and cost savings, creating additional money to ease unions' pain, according to people familiar with the matter.
US Airways chief executive Doug Parker said, "First of all, today's news does not mean we have agreed to merge with American Airlines. It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality. But this is obviously an important first step along that path, and we are hopeful we can all work together to make this happen."
