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New Jersey business merger: US Airways and American may merge

Travelers in New Jersey may not have been aware that shareholders of US Airways Group Inc. met on July 12 to determine whether to merge with American Airlines. Shareholders voted overwhelmingly in favor of the business merger. Now, it will be up to regulators in the United States and in Europe to determine if the merger should be allowed to happen.

The merger of these two airlines could potentially create the largest airline in the world. For that reason alone, regulators are going to be working hard to determine whether the marriage of these two companies will violate antitrust laws. Regulators in Europe are expected to give their decision on the merger by the end of July. The impact on airfares alone could be highly significant.

One other obstacle could be the creditors of AMR Corp., the parent company of American Airlines. The airline filed bankruptcy back in 2011, and the merger will require not only approval from creditors, but also from the bankruptcy judge. Creditors have until July 29 to vote and the hearing on approval of the merger is currently scheduled for Aug. 15. It is anticipated, however, that neither the judge nor the creditors will be opposed to the merger.

If the business merger is allowed to go through, the new company will be called American Airlines Group Inc. This merger would also mean that control of the majority of air travel in the United States would belong to just four airlines. Frequent travelers in New Jersey may want to keep an eye on this merger to see how it will affect their travel plans.

Source: delmarvanow.com, "Shareholders of US Airways strongly approve American merger," David Koenig and Scott Mayerowitz, July 14, 2013

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