No. 1 business story of 2013: American Airlines merger Arnold, Kyle . McClatchy – Tribune Business News ; Washington [Washington]22 Dec 2013.

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ABSTRACT

The year started with former AMR Corp. CEO Tom Horton adamant that American Airlines could emerge from

bankruptcy as a standalone company, ready to compete with airlines that had already consolidated and staked a

dominant position in the industry.

FULL TEXT

Dec. 22–Twelve months ago, it was unclear what American Airlines would look like at the end of 2013. A year

earlier, it was unclear if there even would be an American Airlines.

But the whirlwind ride from bankruptcy to merger deal to federal lawsuit has ended in a new company and new

hope for 6,300 employees in Tulsa, even if the trip to get there was painful and the price high.

On Dec. 9 American Airlines finally merged with US Airways to become the world’s largest airline, handing the reins

of the company to new CEO Doug Parker.

The company is now valued at more than $19 billion, and the price of the company’s stock has been growing since

it was first offered, indicating investors have confidence in American Airlines Group Inc. and the changes it took to

get to a merged company.

With that, American officially ended more than two years of bankruptcy, creditors were fully repaid and

stockholders even got a small share of the new company.

But there was plenty that happened along the way to make some doubt that the merger would ever happen.

“There was a lot of unknown,” said Dennis Altendorf, the director of aerospace development and strategy for the

Tulsa Regional Chamber. “They had to come out of bankruptcy, and they had to get clearance from the

government.”

The year started with former AMR Corp. CEO Tom Horton adamant that American Airlines could emerge from

bankruptcy as a standalone company, ready to compete with airlines that had already consolidated and staked a

dominant position in the industry.

Horton said that lower labor costs, through a smaller workforce and frozen pensions, could help the company,

along with a new fleet of more efficient and more luxurious planes.

Horton and American struck a deal with US Airways on Feb. 14, pending approval from the bankruptcy court.

The deal gave American and creditors everything they could ask for and even promised raises and equity shares

for employees.

But along the way there were challenges to Horton’s severance. Then in August the Department of Justice sued to

block the merger, claiming then that the industry was too consolidated and that customers would suffer.

Days before the lawsuit was set to go to trial, the two sides struck a deal to give up key slots in New York and

Washington, D.C., and the deal was allowed to go forward.

Now 100,000 workers at the company are looking forward to a happier coming year, yet it’s one still full of

uncertainty. Parker and American’s other new leaders must decide how Tulsa and American’s primary

maintenance and overhaul base fits into the future for the world’s new largest airline.

Kyle Arnold 918-581-8380

[email protected]

Answers for many workers

One of Tulsa’s largest private employers, American Airlines and 6,300 local employees went from bankrupt to an

entirely new company. With a new boss, workers at American’s largest maintenance base are still looking for

security.

Credit: Tulsa World, Okla.

DETAILS

Subject: Airlines; Bankruptcy; Bankruptcy reorganization

Company / organization: Name: American Airlines Inc; NAICS: 481111

Publication title: McClatchy – Tribune Business News; Washington

Publication year: 2013

Publication date: Dec 22, 2013

Publisher: Tribune Content Agency LLC

Place of publication: Washington

Country of publication: United States, Washington

Database copyright  2018 ProQuest LLC. All rights reserved. Terms and Conditions Contact ProQuest

Publication subject: Business And Economics

Source type: Wire Feeds

Language of publication: English

Document type: News

ProQuest document ID: 1470294132

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294132?accountid=45844

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Last updated: 2017-11-20

Database: ABI/INFORM Collection