Must-know: An overview of the American Airline Group

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Must-know: An overview of the American Airline Group PART 1 OF 12

Overview: American Airlines Group Inc.

American Airlines Group Inc.

AMR Corporation, formed in 1982, is the parent company of American Airlines Inc. and AMR Eagle Holding Corporation. In December, 2013, AMR Corp., which had filed for bankruptcy in November, 2011, merged with U.S. Airways Group and changed its name to American Airlines Group. The merged entity continues to serve passengers and transport cargo, but with an expanded coverage of more than 330 destinations through its primary hubs in Charlotte, Chicago, Dallas, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington.

American Airlines (AAL) is now the largest airline as measured by available seat miles (or ASMs) with a 26% market share closely followed by the two legacy airline competitors, United Continental Holdings (UAL) with a 25% share and Delta Airlines (DAL) with a 23% share. Together with its low cost competitors, Southwest (LUV) and Jet Blue (JBLU), the top five airlines comprise 91% of the total domestic market share in U.S.


Overview: American Airlines Group Inc.

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AMR had filed for bankruptcy in 2011 after reporting losses for four consecutive years. The airline then restructured its costs resulting in a 17% reduction in labor costs. In 2Q13 it reported a profit of $357 million. Under the reorganization plan, the merger of AMR with U.S. Airways was valued at $11 billion and approved by the New York bankruptcy court.  U.S. Airways’ shareholders were supposed to get 28% of the stocks of the combined entity. The remaining 72% will go to AMR creditors, unions, and shareholders. It was decided that the combined entity will use the brand name of American Airlines. U.S. Airways management will retain operational and management positions. The two airlines AMR Corp. and U.S. Airways will continue operating separately until the Federal Aviation Administration (FAA) issues a single operating certificate which is expected to take 18–24 months. After the merger U.S. Airways left Star Alliance to join One World alliance group in March, 2014.



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