Bloomberg reports that US Airways (NYSE: LCC) may make a merger bid for bankrupt AMR, parent of American Airlines. The action would make sense for several reasons. The first of these is that AMR and US Air did not participate in the series of deals that created huge, and probably more efficient airlines when Delta combined with Northwest and United with Continental. Whatever operating efficiencies these combinations brought cause competitive disadvantages for US Air and American.
The deal would also take advantage of AMR’s current status in Chapter 11 as it cuts airplane leases, money due creditors, and perhaps jobs and pensions.
Bloomberg reports that
US Airways Group Inc. is studying a potential merger with bankrupt AMR Corp. that would fix a weak domestic route system at American Airlines and boost revenue, two people familiar with the matter said.
President Scott Kirby is leading US Airways’ analysis of how to combine the airlines, said the people, who asked not to be identified because the matter is private. Any bid may still be close to a year away, because AMR now holds the exclusive right to file a reorganization plan, the people said.