American Airlines Merger Could Save Two Airlines

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Will merger save two airlines that filed bankruptcy?

Today there is even more evidence that bankruptcy is not the end of the world. As I previously noted,  a Chapter 11 bankruptcy filing by American Airlines didn’t stop the planes from flying. That’s the goal: Business goes forward, with the bankruptcy system keeping creditors off the backs of the bankrupt company. A plan of reorganization works its way through the legal process, and the next thing you know, the company emerges as a new, leaner business dynamo.

That process worked previously for America West (now US Airways), twice, and now American is in the process.

The buzz lately has been that American is even looking to merge with another airline. One suitor turns out to be none other than Arizona-based US Airways. Between the two airlines, we have seen three bankruptcy filings in recent years. And yet, according to USA Today, US Airways’ CEO, Doug Parker, disclosed Friday that his airline has been negotiating with unions for American’s employees, and even reached an agreement. The merger is not final, yet. But reaching a deal with the employees’ unions is a big step.

The moral of the story is, there is indeed life after bankruptcy. And that is as true for regular people as it is for big airlines.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Clint W. Smith, P.C. | Attorney Advertising

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