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US Airways to merge with American Airlines

Deal worth $11 billion will create the world's largest airline


NEW YORK—US Airways is poised to finally become the industry giant it has long aspired to be. The company has often been ridiculed within the aviation industry and remains a perennial afterthought among travellers. But it hopes to shed that image by merging with the larger—but troubled—American Airlines, an $11-billion deal which will create the world’s largest airline.

The deal is expected to be announced February 14, according to four people close to the situation, who requested anonymity because they are not authorized to speak about the merger. American has been in bankruptcy since November 2011. Its creditors will own the majority of the new carrier but it will be US Airways management at the helm. Airline consultant Paul Sterbenz calls it “an example of the little fish swallowing the big fish.”

US Airways was patched together from several scrappy regional carriers on the brink of bankruptcy. Though it has grown over its 73-year history to become the nation’s fifth largest carrier, in many ways, it has remained a second-string player. The merger with American will elevate both airlines to the same level as Delta and United.

International business travellers will be left with just three mega-airlines to pick from and the merger will likely bring to a close more than 30 years of US airline consolidation.