US Airways & American Airlines Potential Merger

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    Aug 31, 2012 10:31 PM GMT
    Per USA Today:

    http://travel.usatoday.com/flights/post/2012/08/us-airways-we-have-signed-non-disclosure-pact-with-american/836329/1


    US Airways announced this morning that it has signed a non-disclosure agreement with American Airlines. The agreement will allow the companies to confidentially disclose sensitive financial information to each other as they evaluate the merits of a potential merger.

    Read on for the full text of a letter in which US Airways CEO Doug Parker announced the news to employees:

    Non-Disclosure Agreement (NDA) Signed: An Important Message from CEO Doug Parker

    August 31, 2012

    Dear Fellow Employees:

    Today we announced that US Airways has entered into a Non-Disclosure Agreement (NDA) with American Airlines' parent company, under which both companies have agreed to exchange certain confidential information and to work in good faith to evaluate a potential combination. We are pleased to be working directly with American to study a potential merger and we consider this very good news. It does not mean we are merging – it simply means we have agreed to work together to discuss and analyze a potential merger.

    A Non-Disclosure Agreement is pretty much what it sounds like. We, along with American, have agreed to not publicly disclose anything about the discussions or analysis as we move forward because we don't believe that would be productive. We have also agreed not to discuss the work that is being done to analyze a potential combination with anyone not covered by the NDA. This agreement will likely remain in place until either a deal has been signed or we have determined this process will not result in a transaction.

    As a result, we will not be able to be as open and candid about the discussions with American as we usually are about issues that are important to all of us. We will still be very communicative, of course, about all other aspects of our airline, and our Communications Team will continue their great work through About US, US Daily, Wings, State of the Airline webcasts, Crew News webcasts, etc.

    I trust you recognize the importance of signing this NDA and we appreciate your understanding. While we may not be providing regular updates on this process, rest assured your management team is working diligently and aggressively to do what is best for US Airways and our hard-working team members. I will let you know more as soon we are able.

    In the meantime, please keep up the great work. You all are doing a wonderful job of taking care of our customers and running a great airline. The results are remarkable. Thank you so much for all you do.

    Sincerely,

    Doug

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    Sep 01, 2012 1:26 AM GMT
    both mediocre airlines. and a merger will not change this.
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    Sep 01, 2012 1:44 AM GMT
    Blackguy4you saidboth mediocre airlines. and a merger will not change this.
    It'll make it more appealing for a larger airline to buy them as one company instead of two.
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    Sep 01, 2012 2:26 AM GMT
    paulflexes said
    Blackguy4you saidboth mediocre airlines. and a merger will not change this.
    It'll make it more appealing for a larger airline to buy them as one company instead of two.


    Which larger airline do you think would? Given the way the airline industry has consolidated the past ten or so years, I hardly think that the government would allow Delta or United to buy a merged American Airlines/US Airways.

    Conversely, current US law forbids foreign airlines from taking more than a 25% stake in a US airlines. I would love to see that law changed, thereby allowing higher quality airlines such as British Airways, Lufthansa, Singapore Airlines, Air Canada, Cathay Pacific, and their ilk to come in and shake things up a bit. I'm certain there are a number of non-US airlines that would love to get their hands on hub airports/cities like JFK, ORD, MIA, LAX, SFO, DFW, ATL, and so on.