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Bankruptcy judge approves airline merger settlement

Some Florida residents may have been following recent news stories concerning a planned merger between American Airlines and US Airways. American Airlines filed bankruptcy two years ago; however, they had been counting on a merger with US Airways in order to remain operable. The Justice Department had filed an anti-trust suit in an attempt to block the merger, but ended up dropping the suit when both airlines agreed to give up slots at airports in key cities.

On Nov. 22, a bankruptcy court gave the approval for both airlines to merge after resolving issues with anti-trust regulators. American Airlines' parent company, AMR Corp., would be allowed to exit bankruptcy in order to merge with US Airways Group. The $17.2 billion deal will pave the way to create the world's largest airline.

In November 2011, AMR declared bankruptcy after it was overcome with debt resulting from increased expenses, including labor costs. Two years later, the airline is poised to restructure and merge with US Airways in an attempt to create the world's largest airline. Following the judge's ruling, American Airlines released a statement asserting that they would once again be competing to serve its customers in communities worldwide.

AMR was able to work through its issues, which include anti-trust regulators, and re-organize through filing bankruptcy. According to the airline, the merger will be completed on Dec.9. Its alliance with US Airways should enable the airline to emerge as the strong entity it once was, indicating that bankruptcy does not always mean the end of a business, but could prove a new beginning instead.

Source: FOX Business, "Bankruptcy Judge Approves AMR Merger Settlement", Dunstan Prial, November 27, 2013

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