Here's What Could Make the AMR-US Airways Merger a Success

Fleet changes could make all the difference.

Tim Beyers
Tim Beyers
Feb 14, 2013 at 9:17PM
Industrials

After months of negotiations and handwringing, US Airways (UNKNOWN:LCC.DL) and AMR Corp. (UNKNOWN:AAMRQ.DL) have agreed to merge. Current US Airways chief Doug Parker will lead the carrier, which will carry the American Airlines brand and updated livery.

Parker's ascent is unusual, in that current AMR stakeholders -- notably bondholders and creditors who've been positioning for a claim on the carrier's assets in bankruptcy -- will own 72% of the combined carrier. Equity holders get 3.5% of that stake.

Plenty of investors dislike the deal. Shares of US Airways fell 7% in Thursday morning trading, perhaps echoing the sentiments of the Fool's Sean Williams, who predicted that the combined carrier would become the "worst company ever."

Is he right? Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova says there's more to the story, and cites one strategy Parker could take to boost profits measurably over the short and long-term. Click the video below to learn more, and then leave a comment to let us know what you think.