American Airlines and US Airways (LCC) have formally announced plans to merge in a deal that creates the world's largest air carrier.
The deal comes after several turbulent years that were marked by a bankruptcy protection filing and consolidation in the U.S. airline industry, and leaves four large carriers competing in the industry.
American has been restructuring under bankruptcy protection since late 2011. The merger is pending approval by the U.S. Bankruptcy Court for the Southern District of New York. The companies said the deal is expected to be completed in the third quarter.
Under the terms of the deal announced Thursday, stakeholders of AMR, parent of American Airlines, will own 72 percent of the combined company, while US Airways shareholders will own 28 percent. The deal has the implied combined equity value of $11 billion.
The combined carrier will take the name American Airlines since the brand has broader appeal around the U.S. and internationally.
Thomas Horton, the current chairman and CEO of AMR, will serve as chairman of the combined airline through its first annual meeting of shareholders. Doug Parker, the current CEO of US Airways, will become CEO of the new American, and assume the chairman title after Horton's service.
The companies scheduled a news conference at Dallas/Fort Worth International Airport later Thursday morning to talk about the merger.
Meanwhile, customers can continue to book travel as well as track and manage flights and frequent flyer activity through AA.com or USAirways.com. At this time, there are no changes in the frequent flyer programs of either airline. All miles on either airline will continue to be honored.
-The Associated Press also contributed to this report.
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