Friday November 21, 2014

Supreme Court Rejects Attempt to Block AA-US Airways Merger

Justice Ruth Bader Ginsburg rejected the request from a group of 39 airline passengers who contended that the merger would hurt consumers by reducing competition.

USA Today is reporting that the Supreme Court over the weekend “rejected a request to block the merger of American Airlines and US Airways, which is scheduled to close Monday.” Justice Ruth Bader Ginsburg rejected the request from a group of 39 airline passengers who contended that the merger would hurt consumers by reducing competition. The 28-page filing by New Jersey lawyer Gil Messina cited a Government Accountability Office report earlier this past summer that 53 million passengers would be affected by the merger, eliminating competition in 1,660 pairs of cities.

Moving forward, adds the Wall Street Journal, “the new American has secured temporary labor agreements that spell out how the merged airline will quickly integrate key groups of workers from the former American Airlines and US Airways.” Still, few expect American’s integration process to go off without a hitch. Chiefly, there remain tensions among the unions that represent most of the combined airline’s 100,000 employees. For instance, its flight-attendant unions are now squabbling over which union will represent its 24,000 cabin-crew members. But Clark University Professor Gary Chaison is among those who are hopeful the relative head start will remove much of the emotional volatility that can hamper workforce integration and distract management from focusing on the various details of combining two big companies. He concludes, “It’s a tremendous benefit to know the workforces are behind the merger. It makes the other more technical issues easier to resolve.”

The San Antonio Express News states that “when American emerges from bankruptcy as American Airlines Group Inc., it will mark a monumental victory for CEO Doug Parker and his executive team at smaller US Airways, who convinced American’s creditors that a merger made more sense than letting American remain an independent company.” Parker is expected to mark the day by ringing the opening bell on the Nasdaq Stock Market, where the new company is set to make its debut under the “AAL” ticker symbol. Parker’s team will spend at least the next couple of years combining the two carriers. “The American Airlines name will live on,” notes the newspaper, “while US Airways will join Continental, Northwest and other airlines that now exist only in the memories of employees and longtime travelers.”

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