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Bloomberg is reporting that a decision to merge American Airlines and US Airways could come as early as Monday. American Airlines and US Airwyas boards are expected to hold a vote in favor of the agreement which would give the creditors of American Airlines a 72% stake in the combined company while giving US Airways a 28% stake.
The combined company calls for $1.2 billion in synergies coming from cost reductions and additional revenue. Most business combinations fail to achieve the targeted value and with a number as high as $1.2 billion, this will be a hard target to hit. Doug Parker will lead the combined company while Tom Horton is expected to negotiate a 1-2 year stent as non-executive chairman.
The combined entity is expected to join the Oneworld alliance, which means all those US Airways mile purchases will now be used for Cathay Pacific, American Airlines, British Airways, Air Berlin, Japan Airlines, LAN, Malaysian Airlines, and Qatar award seats.
If you are like me, in that you already have more miles than you can use, you’ll start looking to lock in award availability over the next year. Because a combined company will mean a combined award balance between American Airlines Advantage and US Airways Dividend Miles.
How big will your combined airline mile balance be?
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