AA merger: chamber pushes tax hike
City officials and chamber operatives see the merger of American Airlines and US Airways as an opportunity to resubmit a tax increase for hundreds of millions of dollars.
Last November, county voters turned down a chamber-backed proposal to raise county sales tax by $748,000,000.00, with more than $300,000,000.00 scheduled for improvements for property owned by the airport authority, some of which is leased to American Airlines.
The chamber sponsored a political campaign that spent hundreds of thousands of dollars to convince voters that American Airlines would close its maintenance center here if the tax increase failed.
Now that it appears that American Airlines will not move or close the maintenance center, chamber representatives and city officials are planning another tax vote. No details have been made public.
American Airlines and US Airways executives met with Congressman Jim Bridenstine, his staff, and key members of Congress last week to brief them on the proposed merger of the two airlines.
The merger process is anticipated to take about six months. American Airlines will emerge from its current bankruptcy and the merger will occur on the same day.
They expect no change in retiree benefits to result from the merger, although the AA bankruptcy has reduced benefits to retirees and some issues are still in litigation.
Asked about the specific impact on Tulsa and the maintenance base here, they replied that they were “optimistic” about Tulsa but they have no conclusions yet on the operations and maintenance plans for the merged company.
Operations people will be integrally involved in merger talks, but anti-trust considerations have not allowed them to hold the in-depth discussions necessary to address the complex questions relating to maintenance plans.
The executives said they did not want to over-promise, but they are “positive about the Oklahoma business climate.” Steve Johnson, US Airways executive vice president, said he had been very impressed with the Tulsa facilities and the American workforce here. “I know American loves Tulsa. We are close to other businesses in Tulsa, like Nordam, so we know Oklahoma has a good business climate.”
AMR Corporation, the parent company of American Airlines, and US Airways Group, Inc. announced that the boards of directors of both companies have unanimously approved a definitive merger agreement to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion based on the price of US Airways’ stock as of February 13, 2013.
The new company will operate under the American Airlines name, one of the most recognized brands in the world.
With firm orders for more than 600 new mainline aircraft, the combined airline will have one of the most modern and efficient fleets in the industry.
Thomas Horton, Chairman, president and CEO of American Airlines, will serve as chairman of the combined airline’s board of directors through its first annual meeting of shareholders. Doug Parker, chairman and CEO of US Airways, will serve as CEO and a member of the board of directors.
Parker will assume the additional position of chairman of the Board following the conclusion of Horton’s service. The Board of Directors will be comprised of three American Airlines representatives, including Tom Horton, four US Airways representatives, including Doug Parker, and five AMR creditor representatives.
The combined airline will offer more than 6,700 daily flights to 336 destinations in 56 countries. The combined airline is expected to maintain all hubs currently served by American Airlines and US Airways, resulting in more travel options for customers. Both airlines expect that the regional carriers they own – AMR Corporation’s American Eagle and US Airways’ Piedmont and PSA – will continue to operate as distinct entities, providing seamless service to the combined airline.
The company will be headquartered in Dallas-Fort Worth and will maintain a significant corporate and operational presence in Phoenix.
The combined airline is planning to take delivery of more than 600 new aircraft, including 517 narrowbody aircraft and 90 widebody international aircraft, most of which will be equipped with advanced in-seat inflight entertainment systems offering thousands of hours of programming.