World's largest airline created as TWA deal is sealed

The world’s largest airline was created on Monday, when a US appeals court reversed an order that had temporarily blocked the $742m purchase of bankrupt Trans World Airlines by AMR’s American Airlines.

The Third US Circuit Court of Appeals in Philadelphia rejected a stay granted earlier after an emergency request by the General Federation of Jewish Labor in Israel, which represents about 100 workers. The new ruling allowed the deal to close.

With effect from Monday, TWA will be operated by TWA Airlines, a wholly owned subsidiary of American Airlines. During a transition period, the two airlines will continue to operate independently, with separate reservations and payroll systems.

Following the transition period, the subsidiary will be fully integrated into American’s operations. Robert Baker, vice-chairman of American Airlines, will become chief executive of TWA Airlines.

Employees of both companies gathered to celebrate the deal in St Louis, Missouri – TWA’s headquarters. Mr Baker said that while the two companies “still have a lot of operational details to work out”, TWA passengers and ticket-holders should expect no changes for the time being.

The deal has already been approved by the US Transportation Department and the US Justice Department.

AMR is waiting for permission to acquire certain assets from US Airways, which is contingent on US Airways’ planned takeover by UAL.

AMR shares closed down 3 cents to $33.94, while shares in UAL, the parent company of United Airlines, rose $2.16 to $32.64.

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