US Airways confirms it may try to merge with American

Posted: January 25, 2012

US Airways Group Inc. management confirmed Wednesday that the airline is studying a potential merger with bankrupt American Airlines.

Chief executive officer Doug Parker said during a conference call with analysts and investors that US Airways has hired the Millstein & Co. restructuring firm, Barclays P.L.C. banking and financial services and the Latham & Watkins L.L.P. law firm to analyze a merger attempt.

Parker made the announcement on the call to discuss fourth-quarter and 2011 earnings results. US Airways and Delta Air Lines Wednesday posted fourth-quarter profits that topped analysts' expectations.

"I am aware that there is a good bit of speculation about our company as it relates to AMR's bankruptcy," said Parker, referring to American's parent AMR Corp. which filed for Chapter 11 bankruptcy protection on Nov. 29, after posting annual losses since 2008.

"While it's no longer imperative that our industry consolidate, and it's definitely not imperative that US Airways participate in consolidation, we are, of course, always interested in studying potential value enhancing opportunities," Parker said.

"Part of studying these opportunities is ensuring we have good counsel. We have, indeed, retained Barclays Capital, Millstein & Co., and Latham & Watkins to help us explore our options as they relate to AMR's bankruptcy."

Parker added, "We expect AMR will remain in bankruptcy for quite some time. And, therefore, we anticipate that we and our advisers will be studying the situation for quite some time. While we are studying the situation, we do not expect there will be any major developments. We certainly have nothing to report today."

A bid is far from certain, and would likely be months away. American, the third-largest U.S. airline by passenger traffic, has said it wants to remain independent.

Other potential suitors include Delta Air Lines and private-equity firm TPG Capital, according to published reports. Parker's remarks were the first public statement by a company of possible interest in a merger with American.


Contact staff writer Linda Loyd at 215-854-2831 or lloyd@phillynews.com.

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