Tag Archives: Inc.

Atlas Air and QANTAS extend their ACMI agreement

Atlas Air Worldwide Holdings, Inc. (New York) today said that its Atlas Air, Inc. unit (New York) and QANTAS Airways Ltd. (Sydney) have extended their long-standing ACMI (aircraft, crew, maintenance and insurance) relationship.

Under the terms of the agreement, Atlas Air will continue to operate two Boeing 747-400 freighters in ACMI service for QANTAS on trans-Pacific routes linking Australia and Asia with the United States.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 747-47UF N492MC (msn 29253) departs from Anchorage, Alaska after a cargo and fuel stop. The freighter also carries small QANTAS Airways sub-titles.

Atlas Air:

SkyWest, Inc. reports lower fourth quarter net profit of $8.6 million and a higher net profit of $59 million for 2013

SkyWest, Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George, Utah) reported net income of $8.6 million, or $0.17 per diluted share, for the quarter ended December 31, 2013, compared to net income of $13.9 million, or $0.27 per diluted share, for the same period last year.

SkyWest also reported net income of $59.0 million, or $1.12 per diluted share, for the twelve months ended December 31, 2013, compared to $51.2 million, or $0.99 per diluted share, for the same period last year.

Quarter Summary

For each of the quarters ended March, June and September of 2013, SkyWest reported improved financial results, on a year-over-year basis, in achieving increases in its fully-diluted earnings per share. However, SkyWest experienced a decline in its financial results for the quarter ended December 31, 2013 compared to its financial results for the quarter ended December 31, 2012. During the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012, SkyWest experienced increased crew training costs as a result of new regulations regarding pilots (FAR 117) that became effective January 4, 2014 of approximately $3.0 million pretax. SkyWest also experienced increased maintenance costs of approximately $5.0 million, pretax, due primarily to performing additional C-checks related to used aircraft that were added to SkyWest’s fleet during 2013. Additionally during the quarter ended December 31, 2013, SkyWest incurred approximately $3.0 million, pretax, of costs associated with advanced pilot training and efforts to become certified to operate the new Embraer 175 regional jets scheduled for deliveries beginning in March 2014.

For the quarter ended December 31, 2013, SkyWest generated increased operating revenues (net of fuel, certain engine overhaul, landing fee and station pass-through revenues under SkyWest’s contracts with its major partners), of approximately $23.0 million, or 3.7%, compared to the quarter ended December 31, 2012, primarily due to additional block hour production of 2.8% and scheduled rate escalations. The increased operating revenues were offset by increased costs in several areas that resulted in a reduced amount of operating and pre-tax income for the quarter ended December 31, 2013 compared to the quarter ended December 31, 2012.

Following are selected statistics and information from the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012:

Pre-tax income declined to $15.1 million, compared to $25.6 million
Fully-diluted EPS declined to $0.17, compared to $0.27
Increased block hour production 2.8% to 584,594 block hours, compared to 568,808 block hours
Increased operating revenues by approximately $23.0 million (net of fuel, certain engine overhaul, landing fees and station pass-through revenues) primarily related to rate escalations under SkyWest’s agreements with its major partners and increased block hour production
Increased total aircraft fleet to 757 aircraft as of December 31, 2013, compared to 744 aircraft as ofDecember 31, 2012

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said, “The decrease in our earnings in the fourth quarter is primarily due to advance preparations for the implementation of FAR 117, the new flight and duty time regulations, and aging maintenance costs on the 50-seat aircraft. We also invested in our future by beginning certification work on the Embraer 175 aircraft that are scheduled for delivery beginning in the first quarter of 2014.”

Financial and Operating Results

Operating revenues totaled $804.4 million for the quarter ended December 31, 2013, compared to $810.7 million for the same period last year or a decrease of $6.3 million. The decrease was due primarily to the reduction of approximately $29.2 million in fuel expenses, certain engine overhaul amounts, landing fees and station costs which were directly reimbursed by SkyWest’s major partners and recorded as operating revenues. However, this reduction was mostly offset by recording $23.0 million in additional operating revenues, primarily resulting from rate escalations under SkyWest’s agreements with its major partners and a 2.8% increase in total block hours for the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012.

Total airline expenses (consisting of total operating and interest expenses) increased $4.0 million, or 0.5%, during the quarter ended December 31, 2013, compared to the same period in 2012. However, after deducting pass-through costs for fuel, certain engine overhaul expenses landing fees and station costs from total operating cost and interest expenses, the remaining total airline expenses increased $33.4 million. Management estimates that approximately $16.9 million of the increase was due primarily to the 2.8% increase in block hour production and approximately $16.4 million was primarily due to additional maintenance costs, cost increases resulting from new pilot regulations (FAR 117) and costs incurred from certifying a new E175 aircraft type.

Under certain of its agreements with its major partners, SkyWest recognizes revenue at fixed hourly rates for mature engine maintenance on regional jet engines and recognizes engine maintenance expense on its CRJ200 regional jet engines on an as-incurred basis as maintenance expense. During the quarter ended December 31, 2013, CRJ200 engine expense under these agreements decreased $1.0 million to$9.6 million, compared to $10.6 million for the quarter ended December 31, 2012, primarily as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events. SkyWest was reimbursed approximately $12.7 million and $10.3 million for engine overhaul expense, under its agreements with its major partners, during the quarters ended December 31, 2013 and 2012, respectively.

Liquidity

At December 31, 2013, SkyWest had $670.1 million in cash and marketable securities, compared to$709.4 million as of December 31, 2012. Cash and marketable securities decreased $39.3 million during the quarter ended December 31, 2013 compared to the balance as of December 31, 2012, due primarily to SkyWest’s payment of $40.0 million (total amount required under agreement) related to deposits on its new order for E175 regional jet aircraft. SkyWest’s long-term debt was $1.29 billion as of December 31, 2013, compared to $1.47 billion as of December 31, 2012. The decrease in long-term debt for the twelve-months ended December 31, 2013 was due primarily to SkyWest’s payment of normal recurring debt obligations. SkyWest has significant long-term lease obligations that are recorded as operating leases and are not reflected as liabilities on SkyWest’s consolidated balance sheets. At a 5.8% discount rate, the present value of these lease obligations was approximately $1.5 billion as of December 31, 2013.

Business Developments

On May 21, 2013, SkyWest announced it had entered into a Capacity Purchase Agreement (CPA) with United Airlines, Inc. to operate 40 new Embraer 175 dual-class regional jet aircraft. The CPA is for 12 years and the new aircraft will be operated by SkyWest’s wholly-owned subsidiary, SkyWest Airlines, Inc. (St. George). Deliveries for these aircraft are scheduled to begin in March 2014 and continue through July 2015.

Additionally, on May 21, 2013 SkyWest announced it reached an agreement with Embraer S.A. for the purchase of 100 new E175 dual-class regional jet aircraft, 40 of which are considered firm orders and the remaining 60 aircraft remain conditional upon SkyWest entering into capacity purchase agreements with other major airlines. SkyWest intends to place the 40 new E175 aircraft into service under the terms of the United CPA discussed above.

On June 17, 2013, SkyWest and Embraer jointly announced an aircraft purchase agreement covering 100 E175-E2 dual-class regional jet aircraft and an option to purchase an additional 100 of the same aircraft. Deliveries for these E2 aircraft are tentatively planned to start in 2020.

During 2012, SkyWest announced the award of 34 additional dual-class aircraft and the removal of 66 CRJ200 aircraft under its Delta Connection Agreements with Delta Airlines, Inc. (Atlanta). As of May 2013, all 34 of these additional dual-class aircraft had been delivered. As of December 31, 2013 SkyWest had removed 33 (22 placed in contract with another major partner and 11 removed from SkyWest’s fleet) of the 66 CRJ200 aircraft from service and currently anticipates removing another 29 CRJ200 aircraft during 2014. SkyWest believes the remaining four CRJ200 aircraft will be removed from its fleet in early 2015. Additionally, 41 of the 66 CRJ200 aircraft have been financed by Delta and will be returned to Delta with no further obligation by SkyWest.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Even though SkyWest is shrinking its Bombardier CRJ200 fleet, it was fortunate to place some of the grounded CRJ200s with American Airlines as an American Eagle carrier. SkyWest’s Bombardier CRJ200 (CL-600-2B19) N864AS (msn 7502) departs the runway at Los Angeles International Airport.

American Eagle-SkyWest:

Southwest to use PASSUR surface management for quicker taxi times at 35 U.S. airports

Southwest Airlines (Dallas) has signed a contract with PASSUR Aerospace to use the surface management module of the PASSUR Integrated Traffic Management system for operation at 35 U.S. airports for quicker taxi times.

PASSUR Aerospace issued this statement:

PASSUR Aerospace, Inc (OTC: PSSR), an aviation business intelligence, Big Data, software and solutions company, today announced that Southwest Airlines has contracted for the surface management module of PASSUR Integrated Traffic Management for 35 US airports across its network to streamline turn times, reduce fuel burn, and enhance on time performance.

The PASSUR Surface Management solution assists Southwest in achieving shorter taxi-in and taxi-out times, and a quicker transition from arrival to departure for an aircraft, resulting in lower costs and emissions from engine fuel burn, less time for passengers spent on the ground in the aircraft, and greater “aircraft utilization” (hours an airplane spends in the air flying passengers). The surface solution is part of an integrated, gate-to-gate traffic management platform that optimizes the entire lifecycle of a flight.

The PASSUR Surface Management solution:

Enables real time and replayed view into how the movement of aircraft is affecting performance, including gates and taxiways
Provides analytical tools to understand where the operation can be optimized
Includes high resolution graphical surface flight tracking on a single, integrated display to enable seamless tracking of the surface, terminal airspace, and en route environments, for gate-to-gate tracking and management of flights. It is part of an integrated traffic management platform with multiple modules that optimize each of the key segments of a flight, gate-to-gate.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Southwest Airlines’ Boeing 737-7H4 WL N240WN (msn 32503) taxies to the departure runway at Seattle-Tacoma International Airport (SEA).

Southwest Airlines:

Mesa Air Group to expand its partnership with US Airways

Mesa Air Group, Inc. (Mesa Airlines) (Phoenix has announced it has reached an agreement with US Airways, Inc. (Phoenix) to extend the term covering its original 38 Bombardier CRJ900 aircraft currently in operation and for the addition of four CRJ900 aircraft to its current fleet of 47 aircraft under the US Airways Express contract. The term of the agreement covering the 38 aircraft was extended until 2021 and the term for the 4 additional aircraft is 8 years from their induction date. No further details of the agreement were released.

Mesa currently operates 69 aircraft with approximately 396 daily system departures to 77 cities, and recently announced an additional 30 Embraer 175 aircraft will be flying for United Airlines. Mesa operates as US Airways Express and United Express under contractual agreements with US Airways and United Airlines, respectively, and independently as go!.

Eventually the company will become a new American Eagle branded operator with the final merger of the two AOCs into one for American Airlines.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Bombardier CRJ900 (CL-600-2D24) N919FJ (msn 15019) of Mesa departs from the Charlotte hub.

US Airways Express-Mesa:

Sky King ceases all operations

Sky King‘s (Lakeland) remaining employees were notified on January 26, 2014 that Sky King, Inc. was ceasing operations. On January 6, 2014, President Frank Visconti was replaced by Dr. Daniel Carson, formerly of Vision Airlines. According to this article by AviationPros.com, Lakeland Linder Regional Airport Director Gene Conrad confirmed the charter airline has suspended operations at LAL.

Sky King in late 2013 returned most of its fleet as it lost some business including many of its charters flights to Cuba.

The company never really recovered after Direct Air went out of business on March 13, 2012 causing Sky King to filed for Chapter 11 bankruptcy reorganization on March 16, 2012. It filed again on August 31, 2012.

The company originally commenced operations in July 1990, based in Sacramento, California. Its first customer, the NBA Sacramento Kings, was the reason for its name which was also the name of an old TV show.

Read the full article: CLICK HERE

Copyright Photo: Luimer Cordero/AirlinersGallery.com. Most of the aircraft did not have titles. Boeing 737-4Q8 N916SK (msn 24706) wore C&T Charters titles, one its Cuban charters clients.

Sky King:

Hawaiian Holdings reports 4Q GAAP net income of $17 million, $52 million for 2013

Hawaiian Holdings, Inc. (Honolulu), parent company of Hawaiian Airlines, Inc. (Honolulu), reported its financial results for the fourth quarter and full year 2013.

Operating income grew to $34 million in the fourth quarter compared to $12 million in the prior year period. For the full year, operating income grew to $134 million compared to $129 million in the prior year period.
Pre-tax income of $28 million in the fourth quarter compared to a loss of $6 million in the prior year period. For the full year, pre-tax income of $86 million was flat compared to the prior year period.
GAAP net income in the fourth quarter of $17 million or $0.31 per diluted share compared to a loss of $3 million in the prior year period or $(0.07) per diluted share. For the full year, GAAP net income of $52 million or $0.98 per diluted share compared to $53 million or $1.01 per diluted share in the prior year period.
Adjusted net income, reflecting economic fuel expense, in the fourth quarter of $12 million or $0.22 per diluted share compared to $0.1 million in the prior year period or $0.00 per diluted share. For the full year, adjusted net income, reflecting economic fuel expense, of $47 million or $0.88 per diluted share compared to $56 million or $1.06 per diluted share in the prior year period.
Unrestricted cash and cash equivalents of $423 million compared to $406 million in the prior year period.

Mark Dunkerley, the Company’s President and Chief Executive Officer, commented that “the fourth quarter’s results continued the trend in improving financial performance after a difficult start to the year. Demand remains strong in our markets and we have strategies to mitigate cost pressures. We are looking forward to the year ahead confident in the great job done by our employees taking care of our customers on the ground and in the air. They remain the core asset of our business and the source of great pride among us all.”

Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables.

Liquidity and Capital Resources

As of December 31, 2013 the Company had:

Unrestricted cash and cash equivalents of $423 million.
Available borrowing capacity of $67 million under Hawaiian’s Revolving Credit Facility.
Outstanding debt and capital lease obligations of approximately $806 million consisting of the following:

$430 million outstanding under secured loan agreements to finance a portion of the purchase price for seven Airbus A330-200 aircraft.

$154 million outstanding under secured loan agreements to finance a portion of the purchase price for 15 Boeing 717-200 aircraft.

$111 million in capital lease obligations to finance the acquisition of an Airbus A330-200, two Boeing 717-200 aircraft and aircraft-related equipment.

$35 million outstanding under secured floating rate notes for two Boeing 767-300 ER aircraft.

$76 million of outstanding Convertible Senior Notes.

2013 Highlights

Operational

Ranked #1 nationally for on-time performance for all reported months in 2013 except for January by the U.S. Department of Transportation Air Travel Consumer Report.
Ranked the #1 domestic carrier for travel to Hawai’i by Travel + Leisure.
Successfully implemented multiple upgrades to our Revenue Management and Inventory Systems.

Fleet and financing

Added five new A330-200 aircraft and returned / retired four Boeing 767-300.
Took delivery of one ATR 42-500 twin-turboprop aircraft to inaugurate new service to Moloka’i and Lana’i in 2014.
Executed a purchase agreement with Airbus for 16 new A321neo aircraft for delivery between 2017 and 2020, with purchase rights for an additional nine aircraft. The long-range, single-aisle aircraft will complement Hawaiian’s existing fleet of twin-aisle aircraft used for long-haul flying between Hawai’i and the U.S. West Coast.
Financed six Airbus A330-200 aircraft deliveries (one delivery in 2013 and five 2014 deliveries) with Enhanced Equipment Trust Certificates (EETC) at a blended rate of 4.13%.

Product and loyalty

Enhanced inflight experience on Boeing 767-300 aircraft by becoming the only U.S. carrier to offer the Apple iPad mini as a replacement for the prior portable entertainment system.
Entered into a new credit card agreement with Barclays Card for a new co-branded credit card effective January 1, 2014.
Announced the introduction of new Extra Comfort economy seating on all A330-200 aircraft beginning in the third quarter 2014.
Expanded our frequent flyer partnership with American Airlines.
Entered into new frequent flyer and code-share agreements with China Airlines.

New routes and increased frequencies

Honolulu to Auckland, New Zealand three-times-weekly service launched in March.
Honolulu to Sendai, Japan three-times-weekly service launched in June.

Honolulu to Taipei, Taiwan three-times-weekly service launched in July.
Announced Honolulu to Beijing, China three-times-weekly service beginning in April 2014, pending government approval.
Announced the reintroduction of daily non-stop service from Honolulu to Oakland beginning in January 2014, an increase from four-times-weekly. Also, announced seasonal service, during the summer of 2014, between Oakland and Kona, three-times-weekly and between Oakland and Lihu’e, four-times-weekly.
Announced seasonal service, during the summer of 2014 between Los Angeles and Kona, three-times-weekly and between Los Angeles and Lihu’e, four-times-weekly.
Announced daily non-stop service from Maui to Los Angeles, beginning in July 2014.
Announced additional service from Honolulu to Brisbane from three-times-weekly to four-times-weekly, beginning in March 2014.

First Quarter and Full Year 2014 Outlook

The table below summarizes the Company’s expectations for the first quarter ending March 31, 2014 and the full year ending December 31, 2014, expressed as an expected percentage change compared to the results for the quarter ended March 31, 2013 or the year ended December 31, 2013, as applicable (the results for which are presented for reference).

	First
	Quarter
Item	2013	Guidance

Cost per ASM Excluding Fuel (cents)	8.28	Up 5% to up 8%
Passenger Revenue Per ASM (cents)	11.11	Up 4% to up 7%
Operating Revenue Per ASM (cents)	12.37	Up 4.5% to up 7.5%
ASMs (millions)	3,965.8	Up 1% to up 3%
Gallons of jet fuel consumed (millions)	53.9	Up 0.5% to up 2.5%


	Full Year
Item	2013	Guidance
Cost per ASM Excluding Fuel (cents)	7.88	Up in the low single digits
ASMs (millions)	16,785.8	Up 4% to up 7%

Copyright Photo: Bruce Drum/AirlinersGallery.com. Boeing 767-33A ER N587HA (msn 33421) taxies at Seattle-Tacoma International Airport.

Hawaiian Airlines:

Atlas Air to operate a Boeing 747-800F for BST Logistics in Hong Kong

Atlas Air Worldwide Holdings, Inc. (New York) has announced that its Atlas Air, Inc. (New York-JFK) unit has entered into a contract with BST Logistics (Hong Kong) Company Limited (BST Logistics), a business partner of Navitrans International Freight Forwarding Co., Ltd., to provide Boeing 747-8 freighter service.

The contract is for one aircraft under an ACMI (Aircraft, Crew, Maintenance and Insurance) agreement, with service expected to begin in February 2014 and operating in key global routes connecting the U.S., Europe and Asia.

BST Logistics provides dedicated airfreight services on a global basis and serves some of the largest shippers in the world.

Copyright Photo: Nick Dean/AirlinersGallery.com. Atlas Air’s Boeing 747-87UF N854GT (msn 37566) departs from Paine Field near Everett.

Atlas Air:

American orders 30 Bombardier CRJ900s to be operated by PSA Airlines and 60 Embraer ERJ 175s

American Airlines (Dallas/Fort Worth), a wholly owned subsidiary of American Airlines Group Inc., announced today that it has signed agreements with Bombardier Inc. and Embraer S.A. to purchase 90 new 76-seat regional jets. Consistent with American’s Plan of Reorganization and Merger Agreement, these aircraft will provide much improved economics for the airline as they will replace smaller, less efficient 50-seat regional aircraft scheduled for retirement.

American has firm orders for 30 Bombardier CRJ900 NextGen aircraft, with options for up to 40 more. The CRJ900s will have 12 First Class, 32 Main Cabin Extra and 32 Main Cabin seats, and the firm order of CRJ900 aircraft will be operated on behalf of American by PSA Airlines, Inc. (2nd) (Dayton), a wholly owned subsidiary of US Airways. American expects to begin taking delivery of the CRJ900s in the second quarter of 2014.

American also has firm orders for 60 Embraer ERJ 175 type aircraft with options for up to 90 more. They will feature 12 First Class, 20 Main Cabin Extra and 44 Main Cabin seats, and American expects to begin taking delivery in the first quarter of 2015. The company will determine which regional carrier will fly the E175s at a later date. Both the CRJ900 and the E175 will fly in the American Eagle livery.

Both the CRJ900 and the E175 are powered by General Electric CF34-8 engines. “GE Aviation has enjoyed a strong relationship with American Airlines and US Airways. We are thrilled to be part of the fleet renewal program underway following the merger,” said Allen Paxson, general manager of the Regional Engines and Services at GE Aviation.

The pilots of PSA Airlines, represented by ALPA, issued this statement on this news:

“The pilots of PSA Airlines, a wholly owned subsidiary of US Airways, welcome the news of American Airlines’ purchase of 30 CRJ900s as an important and exciting step forward for PSA. This firm order fulfills the pledge made to us in a letter of commitment our pilots ratified in September.

“When PSA pilots voted on our new contract in March, and on subsequent agreements, we had to make some difficult decisions. As a result, we preserved core provisions in our contract and improved pilots’ job security here at PSA and career progression to our mainline partner. Today’s announcement of a new aircraft order, coupled with our first scheduled seniority-based interviews at US Airways, prove that our tough decisions have borne fruit.

“While we acknowledge that the planned delivery schedule of these new aircraft is ambitious, the pilots of PSA stand ready to work with our managements to protect and improve our airline and our futures as an integral part of the new American Airlines.”

Copyright Photo: TMK Photography/AirlinersGallery.com. Republic Airlines (2nd) currently is the only Embraer ERJ 175 operator for American Airlines. ERJ 170-200LR (ERJ 175) N401YX (msn 17000363) taxies at Toronto (Pearson).

American Airlines:

US Airways Express-PSA Airlines:

American Eagle-Republic:

The “new American” to operate under the umbrella of the American Airlines Group Inc.

AMR Corporation (Dallas/Fort Worth), whose principal operating subsidiary is American Airlines, Inc. (Dallas/Fort Worth), and US Airways Group, Inc. (Phoenix) today announced that they have applied to list the common stock of the combined company on the NASDAQ Global Select Market. Upon closing of the merger and AMR’s emergence from Chapter 11, the combined company will be renamed American Airlines Group Inc. and will use the ticker symbol “AAL.” Additionally, the common stock of both US Airways Group, Inc. and AMR Corporation will be cancelled and shareholders will receive equity interests in American Airlines Group Inc. per the terms of the Merger Agreement and Plan of Reorganization.

Copyright Photo: Ken Petersen/AirlinersGallery.com. American Airlines’ Boeing 777-323 ER N721AN (msn 31546) prepares to touch down in New York (JFK).

American Airlines:

American and US Airways settle with the Department of Justice giving up 52 DCA slot pairs and 17 LGA slot pairs, paving the way towards a merger

AMR Corporation (Dallas/Fort Worth), the parent company of American Airlines, Inc., (Dallas/Fort Worth) and US Airways Group, Inc. (US Airways) (Phoenix) today announced that the airlines have settled the litigation brought by the U.S. Department of Justice (DOJ), the States of Arizona, Florida, Michigan and Tennessee, the Commonwealths of Pennsylvania and Virginia, and the District of Columbia challenging the merger of AMR and US Airways. The companies also announced an agreement with the U.S. Department of Transportation (DOT) related to small community service from Washington Reagan National Airport (DCA).

Tom Horton, chairman, president and CEO of AMR, and incoming chairman of the board of the combined company, said, “This is an important day for our customers, our people and our financial stakeholders. This agreement allows us to take the final steps in creating the new American Airlines. With a renewed spirit, we are about to create the world’s leading airline that will offer, along with our oneworld® partners, a comprehensive global network and service by the best people in the business. There is much more work ahead of us but we’re energized by the challenge and look forward to competing vigorously in the ever-changing global marketplace.”

Doug Parker, chairman and CEO of US Airways, and incoming CEO of the combined airline, said, “This is very good news and we are grateful to all who have made it happen. In particular, we are thankful to our employees, who throughout this process continued to believe in a better future as one airline and who voiced their support passionately and consistently. We also want to thank the elected officials in the states and communities we serve, the business leaders in our hub cities, and the thousands of customers who endorsed and supported this effort. Thank you as well to the U.S. Department of Justice, the state attorneys general and the U.S. Department of Transportation. We are pleased to have this lawsuit behind us and look forward to building the new American Airlines together.”

Under the terms of the settlement, the airlines will divest 52 slot pairs at Washington Reagan National Airport (DCA) and 17 slot pairs at New York LaGuardia Airport (LGA), as well as certain gates and related facilities to support service at those airports. The airlines also will divest two gates and related support facilities at each of Boston Logan International Airport, Chicago O’Hare International Airport, Dallas Love Field, Los Angeles International Airport, and Miami International Airport. The divestitures will occur through a DOJ approved process following the completion of the merger. Despite the divestitures, the new American is still expected to generate more than $1 billion in annual net synergies beginning in 2015, as was estimated when the merger was announced in February.

After completion of the required divestitures, the combined company expects to operate 44 fewer daily departures at DCA and 12 fewer daily departures at LGA than the approximately 290 daily DCA departures and 175 daily LGA departures that American and US Airways operate today. The divestitures required by the settlement are not expected to impact total employment at the new American.

To ensure much of the service currently operated by the carriers to small- and medium-sized markets from DCA is maintained, the new American has agreed with the DOT to use all of its DCA commuter slot pairs for service to these communities. The new American intends to announce the service changes that will result from the divestitures in advance of the sale of the DCA and LGA slots, so that the airlines acquiring those slots have the opportunity to maintain service to those impacted communities.

In the settlement agreement with the state Attorneys General, the new American has agreed to maintain its hubs in Charlotte, New York (Kennedy), Los Angeles, Miami, Chicago (O’Hare), Philadelphia, and Phoenix consistent with historical operations for a period of three years. In addition, with limited exceptions, for a period of five years, the new American will continue to provide daily scheduled service from one or more of its hubs to each plaintiff state airport that has scheduled daily service from either American or US Airways. A previous settlement agreement with the state of Texas will be amended to make it consistent with today’s settlement.

Completion of the merger remains subject to the approval of the settlements by the U.S. Bankruptcy Court, and certain other conditions. The companies now expect to complete the merger in December 2013.

Copyright Photo: Andi Hiltl/AirlinersGallery.com. American Airlines’ Boeing 767-323 ER N376AN (msn 25445) touches down in Zurich.

American Airlines:

US Airways: