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By: Nick Blumberg on 02/07/2013
One of the largest private employers in Arizona appears to close to a merger. As KJZZ’s Nick Blumberg reports, US Airways and bankrupt American Airlines may be near a deal that’s been long in the making.
A US Airways airplane at Sky Harbor Airport. (File Photo by Al Macias - KJZZ)
American and Tempe-based US Airways have been confidentially discussing a merger since last summer. Now, KTVT in Dallas reports a merger is imminent, and the board of American’s parent company will meet Monday to consider the plan.
Experts say a new airline would likely be headquartered in Texas, meaning Tempe could lose the 2,000 jobs at US Airways HQ. US Airways has said it would maintain Phoenix as a hub.
Bijan Vasigh is a professor at Embry-Riddle Aeronautical University. He said without a merger, American can’t survive market pressure. “In order to emerge from bankruptcy and to be stronger, American Airlines needs to be bigger in size in order to attract and retain their passengers," Vasigh said.
The combined airline would become the largest in the country, and Vasigh said consolidation could impact consumers. "If there are [fewer] airlines in the market, naturally there will be less competition. Demand becomes relatively inelastic. Consequently, airlines would be able to do what? Jack up prices."
Vasigh said while a merger could mean higher ticket prices, it could also mean more destinations.
Updated 2-7-13 3:44pm