Three-Week Delay in AA's Merger Decision
No decision on combining with US Airways expected this week
By Scott Gordon

Scott Gordon, NBC 5 News

The AMR Board of Directors is not expected to vote on a proposed merger with US Airways at its meeting this week, according to a person with knowledge of the high-level negotiations.

The board of directors of American Airlines' parent company, AMR Corp., was set to vote on a consensual merger with US Airways this week but asked for a three-week delay, a person with knowledge of the high-level negotiations told NBC 5.

The board meets on Wednesday.

The delay to better evaluate US Airways' offer would move the decision to the last week of January, the person said.

"I think they're not going to be able to stop it at this point," said Vicki Bryan, an analyst with Gimme Credit. "Just because American Airlines management team wants to delay it, that doesn't mean they'll be able to delay it."

Bryan was among the first to predict American Airlines' bankruptcy in November 2011.

Pilots, flight attendants and some creditors are already on board with a merger. By some estimates, a merged airline would be worth $1 billion more to creditors than a standalone airline.

Overnight, the new airline would become the world's largest.

"Everyone will be happy to see this process end and the future beginning," Bryan said. "Cobbling together a $40 billion airline is not something you knock together in a garage. It's a tough process."

Bryan said US Airways management would likely win control of the new company. Under this scenario, American Airlines CEO Tom Horton and other top executives would be pushed aside.

US Airways has said it would keep the American brand and keep its headquarters in Fort Worth.

Among the hurdles to a merger -- how much US Airways should pay and how much creditors should get.

US Airways offered creditors 70 percent equity in a new airline with 30 percent going to US Airways shareholders, analysts say. Creditors want 80 percent.

Whatever the final numbers, the growing consensus is a merger will happen soon, setting the stage for yet another battle.

"They've got their work cut out for them because Delta and United are not going to wait around for American Airlines to sort itself out," Bryan said. "They are going to step into a world-class competition on a scale no one has ever seen."

American Airlines spokesman Bruce Hicks declined to comment on the board meeting or even confirm the meeting was taking place.

 

ToHo is running out of time-outs...Its going to take a bulldozer to move his butt out of Centerport!

 

EGO is enormous with CEO types.

WD at AWA

 

More indication that it will happen. I mean, how quick does it take to say no

 

Isn't the 777-300 supposed to fly on the 31st? Are they really going to send it out without a paint scheme?

 

Could this be because USAPA decided to take the MOU to a vote instead of just approving it?

 

So you're suggesting what, the AA board should just hand over the keys to Mr Parker because?? Oh you're right, only the AA folks have Egos!

 

I hope that AA management will do what is best for AA employees and stakeholders, but after watching the US management parade, color me skeptical. It's usually what's best for their pockets and egos. Maybe Horton is different.

 

Clearly, the the same wish should go for the US management team as well, but they don't appear to have delivered for the US employees quite yet. I'm sure with the hoped-for merger, all will be forgiven and made right! Color me skeptical!!

 

Not all of us over here are on our knees praying for a merger. I have very mixed feelings about it. I've been through three already and 2 of the 3 had rough integrations. I'm not a fan of DFW, MIA, ORD or JFK. I don't want to do the Latin American flying I already have to do. I don't look forward to the usual pilot arrogance that goes along with it. But, if it positions us and the entire US airline business in a better place, so be to. Three major network carries and SW will be the closest to the regulated environment we've seen in a while. IMHO, as always.

The US Airways management turned two also-rans into a pretty profitable, reliable airline.

I do wish you luck though.