US Airways Group Inc. (LCC) Chairman and Chief Executive Doug
Parker said Friday he is "highly confident" his airline will close
its merger with American Airlines, which antitrust regulators are
trying to block.
The $11 billion deal, which would create the world's biggest
airline by passenger traffic, was expected to have closed by
Monday. But, as Mr. Parker said, "we got thrown a little curveball
by the Department of Justice."
"We will close. I'm highly confident of that," he added.
Speaking at a gathering of restructuring advisers--including the
attorneys and other experts who worked on American's Chapter 11
case--in Washington, Mr. Parker defended the merger and the
competitive benefits he says it will bring ahead of a Nov. 25
antitrust trial.
"Neither American nor US Airways today can compete individually
against the networks of Delta and United," he said. "By combining
the two networks, we're able to offer more, and better, options for
travelers."
Mr. Parker said in addition to shareholders and customers, the
merger will also benefit employees of both airlines.
"We have so many people working for us. That's all they want,"
he said.
The speech, scheduled before the Department of Justice filed its
antitrust suit in August, was to have been a victory lap for Mr.
Parker, who spent months extolling the virtues of a merger.
American parent AMR Corp. (AAMRQ) filed for Chapter 11
protection in November 2011, a little less than a decade after its
competitors used bankruptcy to trim their labor costs and other
liabilities. The company sought a standalone restructuring from the
get-go, even as Mr. Parker began beating the drums for a
tie-up.
His early and sustained efforts gained traction as American's
three unions--the Allied Pilots Association, Association of
Professional Flight Attendants and the Transport Workers
Union--threw their weight behind the merger early last year, and
American eventually followed.
"There's no time to wait, and I'm glad we didn't," Mr. Parker
said. "Had we let momentum get behind the standalone plan, I think
we'd be in a very different position."
The bankruptcy court approved the merger in March and last month
confirmed American's bankruptcy-exit plan, which proposes to give
72% of the stock in the merged airline to AMR shareholders,
unsecured creditors, labor unions and certain employees. US Airways
shareholders would get the remaining shares.
The merger would see Mr. Parker keep his chief executive
position, while AMR's current CEO, Tom Horton, would become
nonexecutive chairman for several months after the merger.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com)
Write to Jacqueline Palank at jacqueline.palank@wsj.com.
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