American Airlines Group:
Destroying value? — September 2019

Consolidation of the three US network carriers and Southwest into four dominant carriers is perceived to have restored profitability and financial stability. But five years after the takeover of US Airways, American Airlines Group (AAG) has a balance sheet net worth of less than zero. How has this happened?

AAG was formed from the merger of US Airways and American Airlines out of Chapter 11 bankruptcy protection in 2014 to create the world’s largest airline by traffic and fleet. The merger seemed to be the final stage in the consolidation of the US industry. The top three network carriers along with Southwest account for 80% of total domestic capacity, and the industry moved into significant positive earnings power for the first time since Carter’s deregulation Act of 1978.