Shareholders of America West Airlines' parent company on Tuesday approved the carrier's proposed merger with US Airways, one of the last milestones in the plan to wed the two geographically distinct airlines.
America West Holdings Corp. said nearly 96 percent of the total voting shares favored the deal.
Later this week, the bankruptcy judge overseeing US Airways Group Inc.'s bankruptcy case will hold a hearing in Virginia to consider final court approval of that carrier's reorganization plan, the centerpiece of which is its proposed union with America West.
"Today's results reflect overwhelming support for our proposed merger with US Airways, which will create a stronger airline that offers improved job stability for our employees, expanded service for our customers and a more long-term, viable investment for our stockholders," said Doug Parker, America West's chairman, president and chief executive. Parker will serve as chief executive of the combined airline.
Parker said in a news release that he anticipates closing the deal as scheduled in late September.
Officials say the two companies could start operating as one by the beginning of October.
The goal is to form a stronger airline that would compete better with lower-cost rivals such as Southwest Airlines Inc. and JetBlue Airways Corp.
Arlington, Va.-based US Airways has a strong presence on the East Coast and in the Caribbean. America West, based in Tempe, operates across the West from hubs in Phoenix and Las Vegas.
Even though America West is considered the financially stronger company, the US Airways name will survive and be used when the nation's seventh- and eighth-largest carriers are combined to create the No. 6 airline.
The deal will be funded by $1.5 billion in new capital from a variety of investors, including the European aircraft maker Airbus.
If the bankruptcy court approves the merger, customers will begin to see image changes almost immediately, airline officials have said. But flight crews, maintenance and safety procedures for each airline will remain separate for some time.
The airlines say soon after the merger, frequent flier miles accumulated at one airline will apply to the other carrier.
The combined airline's headquarters will be in Tempe.
America West shares fell 11 cents to $7.21 in afternoon trading on the New York Stock Exchange.
On the Net:
America West: http://www.americawest.com/awa/
US Airways: http://www.usairways.com/
The deal awaits approval from both America West shareholders and a court overseeing US Airways' bankruptcy case.
US Airways Group Inc. has cleared two union objections to its reorganization plan and proposed merger with America West Holdings Corp.