The parent company of American Airlines, AMR Corp., and US Airways announced an $11 billion merger deal today. The combined airline will be called American Airlines. Together, they form the world's largest airline.
The deal is still subject to regulatory approvals. In an email to ABC News, a Department of Justice spokesperson said, "We'll review this deal as we would any airline transaction."
If approved, the airline will be headquartered in Dallas-Fort Worth and will maintain a "significant corporate and operational presence in Phoenix," the airlines said in a joint statement. The airlines also said they expect to maintain all existing hubs. The combined airline will offer more than 6,700 daily flights to 336 destinations in 56 countries.
READ: What will the merger mean for consumers?
The new airline will be led by US Airways CEO Doug Parker, who will serve as chief executive officer and a member of the board of directors. Tom Horton, American's CEO, will serve as chairman of the combined airline's board through its first annual meeting of shareholders. He will also serve as the combined airline's representative to the Oneworld Alliance, of which he is currently chairman, and the International Air Transport Association for the period of time.
Parker will assume the additional position of chairman of the board after the first annual meeting of shareholders.
In an interview with ABC News, Parker said, "By putting the two airlines together we create about a billion dollars in increased profitability between two carriers. So it allows us to ride out any kid of economic difficulties, either higher fuel prices or slowing economies."
Horton echoed the statement, saying "That financial strength also allows us to continue to invest in new products and services for our customers."
In a message to employees, Parker stressed the importance of having union support. "The union representing US Airways flight attendants has reached a tentative agreement which includes support for the merger. American's unions representing pilots and flight attendants are working with their US Airways counterparts to determine representation and single agreement protocols. This was an important step in this process, and they provide the framework to govern the terms of employment and integration for pilot and flight attendant unions of both companies," he said.
The new American Airlines will be a member of the OneWorld alliance.
Horton told ABC News the merger planning will start right away. The objective, he said, is to " to be able to hit the ground running when we close the merger sometime in the third quarter."
If approved, the American Airlines and US Airways deal will be the third mega-airline merger in just five years. In the same time period, the U.S. has gone from six legacy carriers to four. This merger would leave three. Delta and Northwest announced a merger in 2008, followed by United and Continental in 2010.
AMR Corp., the parent company of American Airlines, filed for bankruptcy protection in Nov. 2011. The airline and its CEO were adamant that American would emerge from bankruptcy as a stand-alone carrier, even as it was courted publicly by US Airways. The merger announcement ends a year of speculation in the airline industry about the future of the two airlines.
"Over the past year, the American team stood tall as we established a rock solid foundation for long-term success through an efficient and effective restructuring," Horton said. "As part of this process, after months of exhaustive analysis and a thorough review of all alternatives, we concluded that this merger is the best outcome for our company, delivering not only the greatest value for our financial stakeholders, but also positioning us well for sustainable success over the long term."