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America West and US Airways Agree on Merger

May 20, 2005

America West and US Airways Agree on Merger
May 20, 2005 – America West Airlines said Thursday it will acquire US Airways. If the airlines can get the necessary approvals and clearances, the deal should be finalized by the fall.

America West CEO Doug Parker said the merger will create the "first nationwide full-service, low-cost airline."

The new airline will operate as US Airways and be headquartered in Tempe, Ariz., America West’s current headquarters. Their combined size is expected to create the sixth largest airline in U.S., based on capacity. The airline also would adopt America West’s fare structure.

Travelers should see no changes until after the deal closes. Even then, the carriers say, a complete merger of operations would take two or three years. Parker said the combined airline would continue serving all cities now served by either.

Once fully integrated, the airline plans to have primary hubs in Charlotte, N.C., Phoenix and Philadelphia, and secondary hubs in Las Vegas and Pittsburgh. It plans to have focus cities in Boston, New York (LaGuardia), Washington and Fort Lauderdale. There also are plans to offer Hawaii service into the network, with nonstop service from Phoenix.

The airlines’ frequent flyer programs will be combined into one when merger is completed. Both programs’ members retain elite status and miles.

The proposed merger does face a number of challenges, included clearances and approval from the unions, stockholders and the federal government and the Air Transportation Stabilization Board, which made federal loan guarantees to both carriers. The bankruptcy court handling US Airways’ Chapter 11 case also must approve it. The merger must also survive any competing bids, should they arise.

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