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US Airways to Merge With America WestPOSTED May 21, 2005 PHOENIX, AZ -- In a deal rumored to happen over the past month, US Airways announced Thursday it will merge with America West to create a national low-cost airline that will take on Southwest Airlines and better compete in a competitive market. The new airline will be known as US Airways and will be headquartered in Tempe, AZ. The two airlines combined will generate over $10 billion a year in revenue and be the fifth-largest airline. Operating as the first national low-cost (LCC) hub-and-spoke network carrier, customers can look forward to simplified pricing, international scope, access to low-fare service to over 200 cities across the U.S., Canada, Mexico, the Caribbean and Europe, and amenities that include a frequent flyer program, airport clubs, assigned seating and First Class cabin service. America West Holdings Corporation Chairman, President and CEO Doug Parker said: "Building upon two complementary networks with similar fleets, closely-aligned labor contracts and two outstanding teams of people, this merger creates the first nationwide full service low-cost airline. Through this combination, we are seizing the opportunity to strengthen our business rather than waiting for the industry environment to improve. A combined US Airways/America West places the new airline in a position of strength and future growth that neither of us could have achieved on our own." US Airways President and CEO Bruce Lakefield said: "US Airways has a strong franchise and great employees that will be enhanced by America West's strengths and success in the low-fare, low-cost marketplace. That we have secured such an impressive slate of equity investors and partner support in a period of such industry uncertainty is a strong indication of the prospects and enthusiasm for this transaction. It has been my objective to ensure the long-term viability of US Airways and the security of our outstanding employees; this merger with America West will accomplish that objective." Subject to approval by the U.S. Bankruptcy Court overseeing US Airways' pending Chapter 11 case and transaction closing, which is anticipated to occur this fall, the merged airlines will operate under the US Airways brand under the leadership of CEO Doug Parker. The merged airline's 13-member board will be comprised of one member from each of three new equity investment companies, six members from the current America West board, including Parker as chairman, and four members from the current US Airways board, including Lakefield as vice-chairman. The combined airline's headquarters will be consolidated into America West's headquarters in Tempe, AZ. For regulatory purposes, both airlines will operate under separate operating certificates for a transition period of two to three years, keeping flight crew, maintenance and safety procedures for each airline separate. To ensure that the substantial consumer benefits are realized quickly, however, the airlines will work together to coordinate schedules, frequent flyer programs and other marketing programs as soon as practical. US Airways/US Airways Express currently serves 179 cities and America West/America West Express serves 96 cities. When merged, the combined airline will become the nation's fifth largest airline, as measured by domestic Available Seat Miles (ASMs). The combined airline is expected to operate a mainline fleet of 361 planes (supported by 239 regional jets and 57 turboprops for feed into the mainline system), down from a total of 419 mainline aircraft operated by both airlines at the beginning of 2005. |
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