Bloomberg News

US Airways-AMR Merger Caps 12 Years of Deals: Timeline

February 14, 2013

US Airways Group Inc. (LCC:US) and AMR Corp.’s American Airlines are combining after playing separate roles in the U.S. industry’s first two big tie-ups of the 21st century.

The consolidation began in 2001 when AMR bought Trans World Airlines Inc. (TWAIQ:US) US Airways Chief Executive Officer Doug Parker, who pulled off a merger in 2005, said in 2011 he saw “one big deal left” after a hostile bid for Delta Air Lines Inc. collapsed in 2007 and two rounds of talks failed with former United Airlines parent UAL Corp.

Completing the merger between Tempe, Arizona-based US Airways and American will trim the number of U.S. carriers with overseas networks and full-service cabins to three from seven at the start of the last decade.

The following is a timeline of successful combinations among major U.S. carriers since 2000.

January 2001: AMR agrees to buy then-bankrupt TWA in a deal eventually valued at $2.8 billion. The purchase pushes Fort Worth, Texas-based American (AAMRQ:US) ahead of United as the world’s largest carrier. The transaction closed in April 2001.

May 2005: America West Holdings Corp. (AWA:US), then led by Parker, agrees to merge with bankrupt US Airways using $1.57 billion from backers including planemaker Airbus SAS and hedge fund Par Capital Management Inc. The deal was completed in September 2005.

April 2008: Delta agrees to acquire Northwest Airlines Corp (NWA:US). in a stock swap eventually valued at $2.75 billion. The tie-up, which was completed in October 2008, makes Atlanta-based Delta the biggest carrier by traffic.

May 2010: United parent UAL and Continental Airlines Inc. (CAL:US) agree to combine in an all-stock merger eventually valued at $3.47 billion. The deal puts together the third- and fourth-largest U.S. carriers by traffic, vaulting the new Chicago-based United Continental Holdings Inc. (UAL:US) past Delta as the world’s biggest airline. The United brand survives. The transaction closed in October 2010.

September 2010: Southwest Airlines Co. agrees to buy AirTran Holdings Inc. (AAI:US) in a cash-and-stock transaction eventually valued at $1 billion. The deal allows Dallas-based Southwest (LUV:US) to add flights outside the U.S. for the first time and gives the low- cost carrier a hub in Atlanta, the world’s busiest airport. The transaction closed in May 2011.

To contact the reporter on this story: Brooke Sutherland in New York at bsutherland7@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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