American Airlines to Match United With Twin Acquisitions?

08 January 2001

American Airlines is close to completing two deals which could help it catch up with its newly expanded rival United Airlines.

American is trying to push through a deal to buy troubled carrier Trans World Airlines, the eighth largest airline in the US. It has also agreed to buy certain assets from US Airways - number six in the nation’s rankings - to allay antitrust concerns following its recent purchase by United.

Should the deals go through, over half of America’s air travel is likely to be shared by United (26%) and American (25%) – already the world’s two largest airlines. Currently the duo control only 36% between them (United 19%, American 17%).

United is believed to be ready to pay $2 billion for TWA and $1.4bn for the US Airways assets. Although neither deal is secure, an announcement on their outcome could be made as early as this week.

News source: Wall Street Journal