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Taber Estes Thorne & Carr Bankruptcy Attorney Mark Ralston quoted in International Business Times article
American Airlines-US Airways Merger: Who Wins, Who Loses?
June 15, 2012 11:33 pm

International Business Times:

US Airways Group Inc. (NYSE: LCC) has been very publicly circling AMR Corporation (PINK: AAMRQ), the bankrupt parent of American Airlines. Yet, industry experts express concerns that while a potential merger would be a boon to the labor unions, the flying public would end up footing the bill.

Fort Worth-based American Airlines, once the top domestic and international carrier in the nation, missed out on the mega-mergers that reshaped the industry in the last decade. As a result, American now competes against much bigger rivals, including United Continental Holdings Inc. (NYSE: UAL) and Delta Air Lines Inc. (NYSE: DAL), which merged with Northwest. American';s rivals are not just bigger; they are leaner and meaner after shedding billions of dollars in costs and renegotiating labor contracts. 

AMR avoided the bankruptcy-and-merger trend, until November 2011. That';s when it cited untenable labor costs in seeking protection from creditors.

The time may have come for AMR, now the nation';s No.3 carrier, to join the party -- albeit begrudgingly. Tempe, Ariz.-based US Airways, the No.5 U.S. airline, is hoping to file paperwork with U.S. antitrust regulators as early as July for a proposed merger with AMR, Reuters reported, citing anonymous sources.

If a tie-up happens, US Airways will get to combine some strong assets, like its hubs at Charlotte and Washington National, with the best of American, while likely trimming some of what';s not working so well at American, said Seth Kaplan, managing partner of Airline Weekly.

The marriage would also create the world';s largest airline, and a serious organizational challenge for US Airways'; top management.


The creditors will likely receive payment on their claims in the form of new stock, according to Mark Ralston, commercial bankruptcy lawyer at Dallas-based Taber Estes law firm. The question is whether they will receive stock of greater value from a US Airways and AMR merger.

"US Airways will try and persuade creditors that this is the case," Ralston said.

Taber Estes Thorne & Carr attorney Mark Ralston in article


"The union workers might in fact be better off with a merger, but it would come on the shoulders of the consumers," Platt said. "Not a really good idea in an election year, at a time when consumer wealth has fallen by 40 percent on average, the unemployment rate is above 8 percent and real wages are falling."

Copyright 2012 The International Business Times Inc.


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