December 09, 2013
Credit: Michael B. Ing/Airlinersgallery.com
American Airlines Group (AAL.O), the world’s biggest airline after AMR Corp’s merger with US Airways Group, intends to take advantage of its broad global network to win more corporate customers, the company’s president said.
American Airlines parent AMR Corp and US Airways sealed their $18 billion merger on Monday. Shares of the carrier are trading on Nasdaq under the symbol “AAL.”
“We will now have a network that can get customers everywhere they want to go. Because of that, we have more ability to compete for corporate customers,” said Scott Kirby, the former president of US Airways who has that role at the new American.
Corporate customers can spend three times as much as leisure travelers, making them a lucrative segment for airlines. Kirby said corporate accounts could bring in “hundreds of millions of dollars.”
Kirby said New York was a prime example of an area where American could make corporate customer inroads and compete better with rivals such as Delta Air Lines (DAL.N), which offers an international network as well as domestic shuttle service for business passengers.
The combination will enable the new American Airlines to combine the former American’s international route map with US Airways’ shuttle service, Kirby said. “We’ll now eliminate that competitive advantage and be on a level playing field with both Delta and United competing for corporate customers,” Kirby added.
At its Fort Worth, Texas, headquarters, American marked the merger completion with a ceremonial bell-ringing to open trading on Nasdaq.
“American has a tremendous legacy and knows what it feels like to be the best,” Chief Executive Doug Parker, who had held that title at US Airways, said. “The new American is about getting that feeling back.”
American Airlines, once the largest U.S. carrier, had fallen to third place behind United Continental Holdings and Delta, both of which used Chapter 11 to cut costs. For years, American’s higher cost structure had put it at a disadvantage.