The U.S. Airways Group: A post-merger analysis

• Published in: Journal of air transport management Vol. 56; pp. 138 - 150
• Main Authors: Manuela, Wilfred S., Rhoades, Dawna L., Curtis, Tamilla
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.09.2016
• Subjects: Airline financial analysis; Airline merger; Post-merger performance; G34; Airline merger; Airline financial analysis; Post-merger performance; L25; L93
• ISSN: 0969-6997; 1873-2089
• DOI: 10.1016/j.jairtraman.2016.04.022

America West Airlines acquired the bankrupt US Airways on September 27, 2005 to form the US Airways Group, improving its competitive position in the US airline industry. This paper analyzes the post-merger performance of the US Airways Group using airline operating metrics and financial ratios for the period 2005 to 2013. While the airline has still a long way to go to improve its leverage and liquidity ratios, its capital structure and ability to pay its obligations have improved since 2005. Moreover, although the airline is still inefficient in utilizing its assets, the efficiency improvements achieved since the merger have resulted in profits and positive returns to investors. Its share prices have also largely outperformed the S&P 500 and the XAL since the merger, an indication that investors are pleased with how the merger is developing over time. In view of the US Airways Group's improving financial and operating performance, the merger is, essentially, a success. •The financial and operating performance of the US Airways Group has improved.•The stock returns of the US Airways Group largely outperformed the S&P 500 and the XAL.•The stock returns of the US Airways Group largely outperformed the stock returns of Delta Air Lines and United Airlines.