Frequently Asked Questions

More About The New American For Employees

1. What does this transaction mean for me?

• We are very excited about the significant benefits this transaction brings to employees of the combined airline. 
• Employees of the new airline will benefit from being part of an airline with a more competitive and stable financial foundation, which will create greater opportunities over the long term.
• Employees can also look forward to a path for improved compensation and benefits.
• Each carrier’s employees will receive reciprocal travel privileges as quickly as possible.
• With a framework already in place to govern the terms of employment and integration for union employees, we anticipate a smooth transition. As we work toward completing the transaction, it remains business as usual at American Airlines and US Airways – nothing will immediately change. 

2. Where will the combined airline’s Operations Control Center, Reservations, Flight Training, Maintenance and Crew Base facilities be located?

• While it is premature to discuss specifics now, during the period between the signing and closing of the combination, a transition-planning team will develop a carefully constructed integration plan to help assure a smooth and sustainable transition.
• Until the transaction closes, we will continue to operate as two independent companies and compete as we do today.
• We are committed to keeping all employees updated on important developments.

3. Will labor groups hold a seat, or seats, on the board of the new company?

• The Board of Directors will initially be made up of twelve members. The Board will be comprised of three American Airlines representatives, including Tom Horton, four US Airways representatives, including Doug Parker, and five AMR creditor representatives.

4. How will union employees be impacted?

• As previously announced, the unions representing American Airlines pilots, flight attendants and ground employees, as well as the union representing US Airways pilots, have agreed to terms for improved collective bargaining agreements effective upon the closing of the merger.
• In addition, the union representing US Airways flight attendants has reached a tentative agreement that includes support for the merger.
• The American Airlines unions representing pilots and flight attendants are working with their US Airways counterparts to determine representation and single agreement protocols.
• The merger will also provide the path to improved compensation and benefits for employees.

5. Will there be any job losses or involuntary furloughs for nonunion employees as a result of this combination?

• Unlike other transactions that are premised on excessive cost cuts, this merger is about the opportunities to grow revenues, which will also create more opportunities for employees as the combined airline flies more people to more places.
• Importantly, we’ve only just announced the agreement and no operational decisions have been made, nor can they be implemented, at this time.
• While we focus on completing the merger, and building a new airline from our two great companies, our integration teams will continue to carefully study the opportunities in a manner that enables us to create the best global competitor possible. 
• Suffice it to say that we expect to build a team that is the “best of both” organizations. 

6. What is the American Airlines-US Airways strategy for labor integration?

• As previously announced, all three unions representing American Airlines employees have agreed to term sheets governing collective bargaining agreements.
• American unions representing pilots, flight attendants, mechanics and fleet service employees are partnering with their US Airways counterparts to determine representation and single agreement protocols.
• During the period between the signing and closing of the combination, a transition team will develop a carefully constructed integration process to help assure a smooth and sustainable transition.  

7. Will there be opportunities for both companies’ employees in terms of relocation?

• While it is premature to discuss specific months, in the coming months, our integration teams will be working to plan the combination, and we are committed to keeping you updated on important developments. 
• What we do know is that the new American Airlines headquarters will be in Dallas-Fort Worth. However, we will retain a significant corporate and operational presence in Tempe.
• Should there be any changes in the future, we will communicate those to you at the appropriate time.

8. Will this new airline hire more employees in the years to come?

• As we mentioned earlier, this combination is about the opportunities to grow revenues, which will also create more opportunities for employees. 
• Importantly, we’ve only just announced the merger and no decisions have been made at this time. 

 

More About The New American For Customers

1. Will my future travel reservations on American Airlines or US Airways be affected?

• No, customers will not see any changes to their existing travel reservations.
• You can continue to book, track and manage flights on aa.com and usairways.com, and earn AAdvantage® miles and Dividend Miles by flying with American Airlines and US Airways and through our numerous mileage partners.

2. What are the advantages of the proposed transaction for customers?

• Customers will have access to more choices and increased service across the combined airline’s larger worldwide network and through an enhanced oneworld® Alliance, creating more options for travel and benefits both domestically and internationally.
• The combined airline is expected to maintain all hubs and service to all destinations currently served by American Airlines and US Airways, with increased service to existing markets and service to new cities.
• The new American Airlines is also expected to provide the most service across the East Coast and Central regions of the U.S., including the East Coast shuttle, and to expand its presence and further strengthen its network on the West Coast.
• In addition, American’s landmark agreements with Airbus and Boeing, designed to transform the new American Airlines fleet over the next four years will solidify its fleet plan into the next decade.
• The combined airline is planning to take delivery of 607 new aircraft, including 517 narrowbody aircraft and 90 widebody international aircraft, many of which will be equipped with advanced in-seat inflight entertainment systems offering thousands of hours of programming, inflight Wi-Fi offering connectivity throughout the world, and “Main Cabin Extra” seating with four to six inches of additional legroom in the Main Cabin.
• Finally, and as currently provided on US Airways’ international Envoy service, American’s new transcontinental and international widebody aircraft will feature lie-flat premium seating in an effort to provide a consistent experience for customers flying on the combined carrier.

3. What changes can customers expect to see immediately?

• As we work toward completing the transaction, which we expect to occur in the third quarter of 2013, it remains business as usual at American Airlines and US Airways.
• You can continue to book, track and manage flights on aa.com and usairways.com, and earn AAdvantage miles and Dividend Miles by flying with American Airlines and US Airways and through our numerous mileage partners.
• Until the merger is complete, each airline will maintain its current loyalty programs (US Airways – Dividend Miles and American Airlines – AAdvantage). Existing miles will continue to be honored, and there will be no impact to  either airline’s credit cards.

4. Will ticket prices increase because of the merger?

• The airline industry is, and will remain, extremely competitive.
• In fact, studies have shown that airline mergers over the past ten years have not driven up airfares, and there is no concrete evidence suggesting that overall rates would rise.
• This transaction will provide a highly competitive alternative to other global carriers. 
• Importantly, the combined airline’s worldwide network will offer superior breadth of schedule to high value travelers, which is critical to global competitiveness.

5. Will you still keep flying to my city? Are you planning to pull out of any cities? What about international service?

• As we mentioned, the combined airline is expected maintain the current hubs of both airlines.
• We expect our complementary flight networks to increase efficiency and provide more options for customers.
• Greater connectivity with oneworld® Alliance partners will give customers more options for travel and benefits both domestically and internationally.

6. Can I now fly American Airlines with my US Airways ticket and vice versa?

• No – American Airlines and US Airways will remain independent airlines until the merger closes.
• You can continue to book, track and manage flights on aa.com and usairways.com, and earn AAdvantage miles and Dividend Miles by flying with American Airlines and US Airways and through our numerous mileage partners.

7. How will the AAdvantage and Dividend Miles Programs and its members be affected by the transaction?

• Upon merger approval, additional information will be provided to customers of our frequent flyer program on any future program updates, including account consolidation or benefit alignment.
• By combining to create the new American, loyalty program members are expected to have even more opportunities to earn and redeem miles from an expanded global network of routes and partnerships, unmatched redemption options including flights, hotels, car rentals, vacation packages, one-way awards and club memberships, and much more.
• Until the merger is complete, each company will maintain its current loyalty programs (American Airlines – AAdvantage® and US Airways – Dividend Miles).
• For the most updated information on our proposed merger please visit www.aa.com/arriving or www.usairways.com/arriving.

8. Do I need to sign up for the American Airlines (AAdvantage) or US Airways (Dividend Miles) frequent flyer programs?

• No, we’ll keep you updated on our progress to merge both programs.
• Upon merger approval, additional information will be provided to customers of our frequent flyer program on any future program updates, including account consolidation or benefit alignment.
• For the most updated information on our proposed merger please visit www.aa.com/arriving or www.usairways.com/arriving.

9. Can I continue to earn and redeem mileage for travel awards with other oneworld or Star Alliance partners?

• Until the merger closes, you can continue to earn and redeem mileage for travel awards with our respective oneworld and Star Alliance partners.

10. If I have miles on both programs, can I combine them and use the total now?

• No – American Airlines and US Airways will remain independent airlines until the merger closes.
• Upon merger approval, additional information on any future program updates, including account consolidation or benefit alignment, will be provided to customers of our frequent flyer programs.

11. Where can I learn more?

• Upon merger approval, additional information will be provided to customers of our frequent flyer program on any future program updates, including account consolidation or benefit alignment.
• For the most updated information on our proposed merger please visit www.aa.com/arriving or www.usairways.com/arriving.  

 

More About The New American For Investors 

1. Why is this transaction in the best interests of American Airlines stakeholders? US Airways shareholders?

• Through their respective ownership stakes, American Airlines stakeholders and US Airways shareholders are expected to benefit from the significant upside potential of the new airline, which will have a combined equity value of approximately $11 billion. 
• The combination is expected to deliver enhanced value to American Airlines stakeholders and is projected to be significantly accretive to EPS for US Airways shareholders in 2014.
• The transaction is expected to generate more than $1 billion in annual net synergies in 2015, including $900 million in network revenue synergies. 

2. What are the terms of the merger?

• Under the terms of the merger agreement, at the time of closing each outstanding share of common stock of US Airways will be exchanged for one newly issued share of common stock of AMR Corporation and stakeholders of AMR Corporation and its debtor subsidiaries will receive newly issued shares of AMR Corporation’s common stock. 
• US Airways shareholders will own 28 percent, and stakeholders of AMR Corporation and its debtor subsidiaries will own 72 percent, of the fully-diluted common stock of the combined company.

3. When is the transaction accretive?

• The combination is expected to deliver enhanced value to American Airlines stakeholders and is projected to be significantly accretive to EPS for US Airways shareholders in 2014.

4. What are the projected revenues for the combined company?

• American Airlines stakeholders and US Airways shareholders are expected to benefit from the significant upside potential of the new combined airline, which is expected to have approximately $40 billion in revenues based upon the combination of each company’s projected 2013 performance. 

5. What are the synergies (cost savings and revenue) resulting from this transaction?

• The transaction is expected to generate more than $1 billion in annual net synergies in 2015, including $900 million in network revenue synergies.
• Of the over $1.0 billion in annual synergies, $900 million are from network revenue synergies, $550 million are from cost synergies, which are offset by $400 million in labor harmonization costs.
• These synergies would mainly come from increased passenger traffic taking advantage of the combined carrier’s improved schedule and connectivity, an improved mix of high-yield business, and redeploying the combined fleet to better match capacity to customer demand—not from cost cuts.
• Our synergy targets are conservative relative to comparable transactions, and we are confident that these are achievable.

6. Who will run the combined company?

• Doug Parker will serve as Chief Executive Officer of the combined company and a member of the Board of Directors.
• Tom Horton, Chairman, President and Chief Executive Officer of American Airlines, will serve as Chairman of the Board through its first annual meeting of shareholders, at which time Doug will assume the additional position of Chairman of the Board. 

7. Why has US Airways adopted a tax benefit preservation plan in connection with the merger?

• The plan designed to help preserve the value of the net operating losses and other deferred tax benefits of US Airways and the combined enterprise resulting from the merger with AMR.
• The plan, which is effective immediately, is also designed to reduce the likelihood that changes in the US Airways investor base would limit the future use of the tax benefits by US Airways or the combined enterprise, which would significantly impair the value of the benefits to all shareholders.
• Further details about the plan will be contained in a Form 8-K to be filed with the Securities and Exchange Commission.

8. When is the merger expected to close?

• The merger is conditioned on the approval by the U.S. Bankruptcy Court for the Southern District of New York, regulatory approvals, approval by US Airways shareholders and other customary closing conditions. 
• The combination is expected to be completed in the third quarter of 2013. 
• During the period between the signing and closing of the transaction, a transition-planning team comprised of leaders from both companies will develop a carefully constructed integration plan to help assure a smooth and sustainable transition.