Entries in American Airlines (25)


Feds Reject Airline CEO's Severance Deal

Photographer: Andrew Harrer/Bloomberg via Getty Images(NEW YORK) -- Too darn high! That’s the unofficial reaction to a sweet severance deal for the CEO of American Airlines.

The proposed merger of American and US Airways Group calls for CEO Tom Horton to lose that job and become chairman of the new company. US Airways boss Doug Parker would run the carrier. American has proposed severance pay of almost $20 million, along with lifetime flight benefits.

The objection filed by the U.S. Trustee’s office says American’s bankruptcy plan does not explain why Horton should get so much money. The objection says Horton’s contract calls for him to get $6.4 million if he had left at the end of last year, and raises the question of why he should get so much more money now.

The case will be decided by a federal bankruptcy court in New York.

Copyright 2013 ABC News Radio


Pros and Cons of an American and US Airways Merger

Andrew Harrer/Bloomberg via Getty Images(NEW YORK) -- American Airlines and US Airways still have to convince the Federal Trade Commission that their proposed merger doesn't create a monopoly, but company officials and industry observers seem confident it will go through.

So, if you're a frequent flyer on one, the other, or both, how will this affect you? Well, first of all, even the airlines themselves acknowledge the full merger process will take at least 18 months. So if you're worried about your frequent flyer miles, you have a year and a half to burn through them. In fact, while the two airlines are in the process of smushing themselves into one, you may well be able to use each airline's miles on the other. That's what Continental and United did when they merged.

All in all, travel experts say miles-holders usually "fare" fine in these situations -- pardon the pun. But there are upsides and downsides to everything. Here are some of the main ones.


1. More places to go. The new airline, which will be called American, promises to make 6,700 flights a day on 600 planes to 336 cities in 56 countries! US Airways and American say they currently only have about a dozen truly redundant routes. If you have miles now on either airline, you'll be able to use them on the new airline to go to all these new places.

2. Nicer aircraft. American has been pushing and publicizing nice amenities like more seats that lie flat, personal in-flight entertainment systems, worldwide Wi-Fi and more seating where you can pay to get 4 to 6 more inches for your poor knees. American has made a big a hubbub about all this, and the new airline is being branded as American, so it's likely you'll see more of these features.

3. Possible Perks. American serves more meals in flight on shorter runs and lets you use miles to book one-way seats. On the other hand, US Airways is known for its enticing frequent flyer redemption rates, such as just 90,000 miles to fly business class to parts of Asia and 110,000 miles to Australia and South Africa. Many analysts fear these goodies will go away. But I view it differently. YOU, as interested flyers, have 12 to 18 months to lobby the new airline to keep the best of BOTH. Email and tweet your desires and demands and see what you can accomplish!


1. Fewer partner airlines. Nobody tracks frequent flyer mile programs as obsessively as Brian Kelly of Kelly's intel is that the newly merged airline will choose to be a part of the OneWorld alliance, of which American is currently a member, and not the Star Alliance, with which US Airways has long been affiliated. "That means it will go from having 27 partners down to just 11," Kelly says. "But that still includes great partners like British Airways, Cathay Pacific and Qantas."

2. Potentially higher fares. In a conference call, the leaders of the new "Franken-airline" swore up and down that their marriage will bring fares down, not up. They argue that as a single, more robust airline they'll be better able to compete with the other big guys. However, fewer players traditionally mean higher prices. Classic supply and demand. So we'll see.

3. More customer competition. When any two airlines merge, there are more top-level flyers under one roof, whether they're called "elite" or "platinum."  That means competition for free seats and upgrades could be ratcheted up.

Copyright 2013 ABC News Radio


American Airlines, US Airways Announce Merger

American Airlines(NEW YORK) -- It's official: American Airlines and US Airways have reached an agreement to become the world's largest airline.

In a statement Thursday, both carriers announced that their boards of directors "have unanimously approved a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion."

The combined carrier will operate under the American Airlines name and will be based in Fort Worth, Texas, the headquarters of American.  US Airways CEO Doug Parker will head the new company.

The new airline is expected to maintain all hubs served by American and US Airways and will offer "more than 6,700 daily flights to 336 destinations in 56 countries."

The merger is expected to be finalized by the third quarter of this year.

Copyright 2013 ABC News Radio


What US Airways, American Airlines Merger Means for Travelers

PRNewsFoto/American Airlines(NEW YORK) -- American Airlines and US Airways announced on Thursday that they will merge their operations and become one airline, called American Airlines.  Together, they will be the world's largest airline by passenger traffic.

So what does the merger mean for travelers?  

In the short-term, travelers will see virtually no changes from either airline.  The merger still faces regulatory obstacles and must be approved by the Department of Transportation and the Justice Department.  If and when it passes that scrutiny, the process of merging the two airlines' operations will begin.

If you're holding a ticket on US Airways or American Airlines, that ticket will still be valid on the airline you planned to fly, on the day and time you planned to fly it.

When you get to the airport, you will head to the same airline check-in counter by which your ticket was issued.

The only possible exception is if you are holding a ticket for many months out and your airline's schedule changes as a result of the merger of flight schedules.  In this case, you will be contacted by the airline ahead of time, typically to the email address you provided when the ticket was purchased.

And members of either airline's frequent flier programs need not worry: Your miles are still valid on your airline and it's very unlikely you'll lose miles or elite status.  

American and US Airways will merge frequent flier programs.  The new American Airlines will be part of the oneworld Alliance.  US Airways will leave the Star Alliance.

Longer term, the merger could mean higher prices.  The U.S., in the last decade, has gone from six legacy carriers (Delta, Northwest, United, Continental, American and US Airways) to four (Delta, United, American and US Airways).

If this merger is approved, just three legacy carriers will remain.

Certainly, the higher fares can't all be attributed to consolidation in the industry (fuel costs, a reduction in available seats and the economy all factor in) but in general, less competition means higher prices.

Higher airfare tends to hit smaller cities harder than larger cities because smaller cities and airports have less competition.

On the up side, the merger will also mean more destinations for the new American Airlines.  US Airways passengers will benefit from American's international routes, particularly in Europe and Latin America.  American will be able to access the smaller U.S. cities where US Airways has a large presence.

Copyright 2013 ABC News Radio


American Airlines and USAirways Merger Announcement Likely Thursday

Joe Raedle/Getty Images(NEW YORK) -- They've been dating for a year, and now it looks as though the marriage of American Airlines and USAirways will be announced Thursday, according to a source close to the negotiations.

The source tells ABC News that details of the merger agreement have been worked out, but it still needs approval from the two airlines' Boards of Directors. They are meeting to consider the deal.

If the two carriers merge, they are expected to retain the American Airlines name. The new airline would become the largest in the world.

Any deal is still subject to approval of the bankruptcy judge overseeing American Airline's bankruptcy, as well as the anti-trust division of the Department of Justice. Both are expected to sign off on the agreement.

This would be the third mega airline merger in the past five years. Delta and Northwest announced a merger in 2008, followed by United and Continental in 2010. The industry consolidation would leave four major carriers operating in the U.S.: American, Delta, United and low-coast carrier Southwest.

For travelers, nothing will change immediately. These complicated mergers can take more than a year to accomplish. Will this ultimately mean higher fares for travelers? Some analysts believe fares won't be greatly affected, because American and USAirways don't compete now on many of their routes.

One thing travelers won't have to worry about is their coveted frequent flyer miles. The airlines will merge their two frequent flyer programs, and the larger route system will give passengers more opportunity to earn those miles.

Airline mergers can be messy affairs. The biggest problem with most mergers is consolidating employees and employee contracts. In this case, deals have already been worked out with pilots, flight attendants and mechanics, which will help ensure smoother sailing when and if the airlines combine.

Copyright 2013 ABC News Radio


American Airlines, US Airways Expected to Announce Merger 

Medioimages/Photodisc/Thinkstock(NEW YORK) -- American Airlines and US Airways are expected to announce a merger this week after months of negotiations, the New York Times reports.

The merger would create the country's largest airline and would expand American's domestic network, especially in the Northeast and Soutwest, making it more competitive in the international market. It would also put the combined airline ahead of of Delta Air Lines and United Airlines, which have both grown through their own mergers in recent years, the paper says.

The new airline will be based in Dallas and will be named American Airlines, according to the New York Times.

Copyright 2013 ABC News Radio


Merger Between American Airlines, US Airways Near

PRNewsFoto/American Airlines(NEW YORK) -- American Airlines unveiled a whole new look last month.  And now, it appears the carrier is about to get a whole lot bigger.

Sources tell ABC News affiliate WFAA-TV in Dallas that a merger between American and US Airways will be announced next week after more than a year of talks.  If the merger goes through, it would make the combined company the biggest airline in the U.S., surpassing United-Continental, according to the Wall Street Journal.

WFAA reports the new company would likely keep the American Airlines name and would be based in Fort Worth, Texas -- the headquarters of American -- but run by the CEO of US Airways.

So how would the consolidation impact consumers?  

On the plus side, Rick Seaney, the CEO of FareCompare, says it could mean newer equipment and technology for travelers.

"If this makes a stronger American Airlines and U-S Airways, they're going to have more money, that means they can invest in their products so some of us will actually, when we buy our next ticket, we may be flying a plane that was built this century and maybe even a few of us, something was actually built this decade," he tells ABC News Radio.

But the merger would cut down the number of airlines in the U.S., likely causing air fares to rise.

"I think, you know, in the short haul, probably no big deal.  In the long haul, it almost, it guarantees that these airlines will never compete and the number one driver of ticket prices is competition, so all things equal, it will drive up prices in the future," Seaney says.

Copyright 2013 ABC News Radio


United Airlines, American Airlines Accused of Running 'Sham Offices' to Dodge Taxes

Andrew Harrer/Bloomberg via Getty Images(CHICAGO) -- Chicago's Regional Transportation Authority is accusing United Airlines and American Airlines of operating "sham offices" in a suburban Illinois town and "dodging" millions of dollars in state sales taxes.

The Regional Transportation Authority (RTA), which helps fund bus and train systems in six counties, said the airlines are avoiding paying a higher 9.5-percent sales tax from their actual offices in Chicago and instead using "sham offices" in Sycamore, Ill., about 63 miles west of Chicago, thereby paying 8 percent in taxes.

Illinois collects sales tax based on where a company claims a purchase was "accepted."

RTA estimates that it has lost $96 million since 2005.

The RTA filed a lawsuit on Monday against United Airlines, which is based in Chicago, and is deferring formal action against American Airlines, based in Fort Worth, Texas, because it is involved in bankruptcy proceedings.

The RTA said both airlines buy and use millions of gallons of jet fuel in Chicago. But the RTA says United Airlines has claimed to "accept" jet fuel at its small office in a strip mall in Sycamore since 2001. American has done the same practice at its small office inside Sycamore's town hall since 2004.

Jordan Matyas, RTA chief of staff, said the RTA has spoken with other tenants in United's office building and was told part-time workers occasionally come to the office.

"It's one room with two empty desks and a model airplane," Matyas said. "This is not a place where they are buying $1 million of jet fuel per day. They are doing that at Sears Willis Tower where they have hundreds of employees."

United Airlines said in a statement that it is still reviewing the complaint, but believes "that any such suit is without merit."

"In fact, the operation of our fuel subsidiary in Sycamore has been examined by tax authorities in the past and has been determined to comply with all applicable laws. We will vigorously defend ourselves against these claims," United said.

Mary Frances Fagan, a spokeswoman for American Airlines, said the company does not comment on pending litigation "but what it is doing in Illinois is permitted under state law."

The RTA said the companies have entered into 25-year agreements with Sycamore, guaranteeing as much as $500,000 each year that they are allowed to claim that they "accept" jet fuel in that city.

Copyright 2013 ABC News Radio


American Airlines Resumes Talks with Pilots After Scares and Delays

Joe Raedle/Getty Images(NEW YORK) -- Delays and plane maintenance issues have finally led American Airlines management and the pilots' union back to the bargaining table for the first time in weeks.

After a tumultuous week of seats becoming loose, flipping over mid-flight in one case, American Airlines announced it was resuming stalled contract negotiations with its pilots' union.

Wednesday, another safety issue put American Airlines under the microscope because of a mid-flight maintenance scare when a plane's landing-gear warning light jammed after take-off.

Flight 1862 from Dallas to St. Louis had to return for an emergency landing 10 minutes into the flight Tuesday. The passengers were told to brace for a crash landing at Dallas-Fort Worth International Airport.

Jim Faulkner, an American Airlines spokesman, said the flight turned back to the airport without incident around 8:40 a.m. local time. Passengers were put on another plane to St. Louis.

"When they said assume the position, it was scary," passenger Elaine Krieger said.

Some passengers were left to wonder whether the landing-gear concern was real, well aware of the airline's recent trouble with labor.

"Some people are cheering as we landed, and the rest of us are thinking, 'Is this a scenario they created, or was it real?'" passenger Jeff Estes said. "Are they really heroes, or are they guys just creating a job action?"

Former American Airlines pilot Ron Carr said pilots would not go that far, but it's clear he said that despite union denials, pilots are using their ultimate power in the cockpit to delay flights by forcing even small maintenance issues, like a broken coffee pot, to be fixed before takeoff.

"I think there's a lot of things that could be written up on an aircraft," Carr said. "You have a, a very complex machine that's being operated and there's always going to be something that's not quite right that could be written up."

Carr, who is currently an assistant professor of aeronautical science at Embry-Riddle Aeronautical University, added that he did not think any pilot would resort to "sabotage" as that would be a safety issue.

"That would be very stupid on their part to pull a stunt like that...they would not do anything of that nature to jeopardize, or purposefully, to cause a problem to cause a delay. That's not going to happen, in my opinion," he said.

If pilots are using their authority to delay flights, it is a tactic that seems to be working for pilots who have put pressure on American by doubling delays and inconveniencing customers.

Thomas Horton, CEO of American parent AMR Corp., said Tuesday in a statement that he was pleased that "intensive bargaining" was scheduled to begin this week.

"It has been a very challenging couple of weeks for our company. As you know, our operations have experienced significant disruption, affecting our customers, our people and our owners," Horton said.

Nearly half of American Airlines' fleet of Boeing 757s -- 47 jets -- were taken out of service earlier this week to make sure that no more of its coach seats came loose in flight, as they now have three separate times. As of Wednesday morning, many of the planes are now back in service as the airline said the loose seats were a result of human or mechanical error and not sabotage.

The airline said a saddle clamp was improperly installed on the planes where the seats disengaged. The latest reported incident of loose seats occurred on a flight from Vail, Colo., to Dallas Sept. 26, the New York Post reported Tuesday.

Flight 443 from New York's John F. Kennedy Airport to Miami had to return to JFK Monday when the loose seats were discovered, the Federal Aviation Administration said in a statement.

The earlier reported incident took place Saturday night when seats came unbolted on American Airlines Flight 685 from Boston to Miami. The flight was diverted and made an emergency landing at JFK.

The FAA said in a statement Tuesday that it was looking into the first two incidents and that the airline's initial inspection of each aircraft had found other rows of seats that were not properly secured.

"Preliminary information indicates that both aircraft had recently undergone maintenance during which the seats had been removed and re-installed," the FAA said.

Copyright 2012 ABC News Radio


American Airlines Offers New Baggage Delivery Service

Joe Raedle/Getty Images(NEW YORK) -- American Airlines has a new service to get passengers on their way more quickly.

The airline is teaming up with BAGS VIP Luggage Delivery to offer delivery of your bags from the airport to your final destination. Whether you’re flying for business or leisure, the service is offered at more than 200 domestic airports and select international airports.

The cost of delivery for one bag is $29.95. Two bags will cost $39.95, and three to 10 bags will cost $49.95. These charges are on top of other baggage fees.

The service allows up to 10 bags to be delivered at one time. Delivery of more than 10 bags must be placed in multiple orders.

American is the first airline to offer a service like this. It says it hopes it will help improve customer wait times.

“We did recognize there were passengers who would like to just bypass the baggage claim,” David Vance, managing director of customer planning operations for American Airlines, said. “By offering this service, we think it provides an additional opportunity for passengers to get to their meetings or their vacations and bypass baggage claim altogether.”

The service began Monday and although no deliveries have been made yet, orders were placed for future flights in several locations, Vance said.

Baggage delivery will take one to four hours, unless your destination is more than 40 miles from the airport. Delivery is only available to destinations within 100 miles of the airport.

At this time, delivery is only available at domestic airports but orders may be placed for departures from select international cities.

“We are going to continue look for opportunities to expand the service internationally but at this point we are unable to do that,” Vance said.

A special indicator will be printed on bag tags to help BAGS VIP Luggage Delivery personnel identify the correct bags. VIP Luggage Delivery will also have a description of the bag, provided by the customer when they place the order. They say they will also have scan data to ensure they are picking up the right bags.

Baggage delivery may be canceled up to 24 hours in advance with no charge. If you call it off later, there will be a $15 cancellation fee.

For now, the service can only be ordered online more than two hours before flight departure. Delivery is available seven days a week, including holidays. A signature is not required for delivery unless selected. For flights landing after 11 p.m., bags will be delivered by noon the following day.

Copyright 2012 ABC News Radio

ABC News Radio