American Airlines is now the world's biggest carrier, formed in 2013 from the merger of the predecessor business of that name, then in bankruptcy protection, with more profitable rival US Airways. The two brands continued to operate side by side until Oct 2015, when the US Airways banner was discontinued. The company operates almost 6,700 flights a day, though the bulk of these are within the US. The system also houses several regional US carriers operating under the American Eagle brand. Total combined passenger numbers were 199m in 2016, but fewer than 20% were on international flights. Total revenue passenger miles for 2016 were 223.4bn, of which 71.1m were international flights. American Airlines is a founder member of the OneWorld Alliance, and a long-standing strategic partner of UK-based IAG. Following merger, most senior management positions in the combined business were taken by US Airways executives, led by chairman & CEO Doug Parker. Combined revenues for 2016 were $40.2bn. American Airlines traces its heritage back to numerous early pioneering regional airlines of the 1920s which merged at the end of that decade to form American Airways. For several decades until the 1960s it was America's biggest airline, establishing a significant international footprint. It managed to struggle through the difficult decade post-911 before finally succumbing to bankruptcy protection in 2011. US Airways traces its heritage to a company founded in 1939 by members of the du Pont family, becoming Allegheny Airlines in the 1950s. Like several US airlines it bounced its way through Chapter 11 administration during the 2000s (not once but twice), before achieving an extraordinary turnaround in both performance and reputation. It made unsuccessful merger approaches to several rivals before finding a willing partner in American. Subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.
Capsule checked 24th March 2017
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Adbrands Weekly Update 29th Jun 2017: Qatar Airways announced plans to acquire a stake of up to 10% in American Airlines, at a cost in excess of $800m, prompting a sudden surge in American's share price. Qatar aims to acquire 4.75% through the open market, and would then seek approval from American's board to increase that stake. However, that approval is unlikely to be forthcoming. The announcement met with negative reactions from both American's CEO Doug Parker and also from unions representing pilots and cabin crew. Qatar's plan expands the tiny Gulf state's international investment strategy. Its state-owned airline already has around 20% of Anglo-Spanish carrier IAG, parent to British Airways and Iberia, while its CEO Akbar Al Baker represents the Qatari state on the board of Volkswagen in which it has a holding of 17%. There are similar investments in numerous other Western companies, making a proposed 10% holding in American Airlines comparatively unexceptional. However, Qatar has come under an unwelcome spotlight in recent weeks as a result of the blockade imposed by Saudi Arabia and other Gulf neighbours, who accuse it of supporting Islamist groups in the region. Qatar denies those allegations, but the backlash from American increases the pressure to come clean about any funding for extremist organisations.
Adbrands Weekly Update 29th Oct 2015: The week's most notable assignment was probably the termination of a 32-year relationship between American Airlines and McCann's TM Advertising. Interpublic had been pitching to retain the business through the Martin Agency, but instead the account was won by Crispin Porter & Bogusky, with media moving to Mediacom.
Adbrands Weekly Update 14th Nov 2013: American Airlines and US Airways have received the green light for their proposed merger after agreeing to surrender a small parcel of slots at Reagan National Airport in Washington and La Guardia New York. Only around 112 flights will be affected, significantly fewer than had been anticipated, and making barely a dent in the two carriers' combined 6,500 daily flights. The deal had originally been opposed by the Justice Department on antitrust grounds, but American and US pledged to fight that ruling in court. The case was due to start later this month, and their tough stance appears to have softened the regulators' position. The agreement is seen as a major victory for the airlines, who hope to complete their merger before the end of the year to create American Airlines Group, which will become the world's largest by passengers.
Adbrands Weekly Update 7th Nov 2013: A merger of American Airlines and US Airways could still go ahead. The two carriers are in talks with the US Justice Department to offer last-minute concessions that might secure regulatory approval ahead of an impending court case. Earlier this year the Justice Dept issued an unexpected lawsuit to block the proposed merger on antitrust grounds. The airlines countered with their own lawsuit alleging unfair opposition, given that rival US carriers had already been granted merger approval. The antitrust case is due to go to court in a few weeks, but US Attorney-General Eric Holder says he hopes to resolve the discussions before then. However, while American and US are prepared to surrender some airport slots, it's not certain that their offer goes far enough to satisfy the regulators.
Adbrands Weekly Update 15th Aug 2013: The planned merger of American Airlines and US Airways, which would create the world's biggest airline by passengers, is being opposed by the US Department of Justice and at least six state attorneys general on antitrust grounds. In an unexpected development, the DOJ this week issued a lawsuit to block the deal, saying that the combination would significantly reduce competition and raise prices on internal flights, not least because the market has already been greatly concentrated by previous such mergers, each of which was approved by regulators. The latest merger, would be one too many, claims the DOJ. Together American and US Airways would control 25% of the market for domestic seats, leapfrogging current leaders Delta (22% share ), Southwest (21%) and United (17%). The roadblock is an especially heavy blow for American, which had hoped to use the merger as its platform to emerge from bankruptcy protection. The two companies said they would pursue all legal options to push the deal though. They certainly have some chance of success if they argue that they are being unreasonably denied the merger opportunity previously granted to the enlarged Delta and United. In addition, American's only other route out of bankruptcy would be to slash the number of flights it currently offers, which would likely have the same effect of raising prices and reducing competition that is currently worrying the DOJ.
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