Nearly all of the senior executives of American Airlines are due to leave the company following its forthcoming merger with US Airways.
Dan Garton, the chief executive of American Eagle, the company’s regional airline, Isabella Goren, the chief financial officer, and Gary Kennedy, the general counsel, will leave the company, it was announced on Monday.*
They will follow Tom Horton, chief executive, who said at the time the merger was made public in February that he would leave when the newly merged company held its first annual meeting.
Only three relatively junior members of the executive management of AMR Corporation, American Airlines’ parent, will join the new company’s eight-person executive management team. Bev Goulet, the chief integration officer, Maya Leibman, chief information officer, and Will Ris, in charge of government affairs, will join from AMR.
The announcement underlines the extent to which executives from US Airways, the fifth-largest US airline by revenues, will take control of the new company after the merger is completed. American is the US’s third-largest airline by revenues – behind Delta and United Continental – but has been under Chapter 11 bankruptcy protection since November 2011.
Doug Parker, the US Airways chief executive who will lead the new company, said the restructuring of American was “far and away the most successful in aviation history”. It would not have been possible without the “exceptional and dedicated work” of Mr Garton, Ms Goren, Mr Kennedy and many of the other American executives who will be departing, Mr Parker said.
“We are grateful for their phenomenal work and dedication and are committed to building on the foundation they have put in place,” Mr Parker said.
US Airways shareholders will receive 28 per cent of the new company’s shares under the proposed merger agreement, while AMR Corporation’s creditors will receive the remainder.
American – which had been suffering competitively because of its higher-than-average costs – has restructured many of its contracts, including those with pilots, flight attendants and maintenance crews, during its bankruptcy.
Sean Lane, the judge who has overseen the AMR bankruptcy, has set no firm date for AMR to leave bankruptcy protection and complete the merger. But AMR has said it expects the deal to go through in the third quarter.
The judge has approved nearly all of the planned reorganisation, except for Mr Horton’s proposed $19.8m pay-off. The judge has said that he will deal with outstanding questions relating to Mr Horton’s pay-off at the final hearings confirming the exit from bankruptcy.
The bankruptcy trustee – a government official charged with overseeing the operation of bankruptcy laws – in March objected to the pay-off, intended to be half in cash and half shares. The trustee said it should not have been so far out of line with the packages offered to other staff.
The Allied Pilots’ Association, which represents American’s pilots, had strongly supported a merger with US Airways, arguing that it offered the best chance of a turnround for the airline.
Keith Wilson, the APA’s president, said it looked forward to working with the new airline’s leadership team.
* This article has been amended from the original. Kenneth Wimberly, the corporate secretary, will not be leaving American Airlines, as reported.
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