US Airways Group Inc (NYSE:LCC): Merger Issues

Denver, CO, 08/16/2013 (Avauncer.com) –  US Airways Group Inc (NYSE:LCC) was established in 1981 and company’s headquarter is in Tempe, Arizona. Its main area of operation is to provide services to its consumers, like flight and fare details and make reservations online. It offers around 3100 flights daily to arrange passenger service to 198 communities in the United States, Canada, Mexico, Europe, the Middle East, the Caribbean and Central and South America. The company’s operating hub is in Charlotte, Philadelphia, Phoenix and Washington, D.C. at Reagan Washington National Airport.

According to Relative Strength Index (RSI) value of 29.12 the share price of LCC has entered into oversold territory. Which suggest a “Strong Buy” position for the stock and it might be good time for the investors to get in on LCC.

Since 2011 American’s parent company, AMR Corp (AAMRQ) worked out the $11 billion merger plan with the LCC to exit its bankruptcy. The judge gave AMR and its creditor’s time limit up to August 23 to submit more information on the appropriateness of restructuring plan and detailed briefs to guide how he should proceed further.

The reason behind this hold on the merger plan is that it would lead to higher fares and hurt consumers as the Department of Justice said AMR and LCC are competing in around more than 1000 routes where one or both offers services, which represents tens of billions of annual revenue.

Stephen Karotkin, lawyer of AMR said that the bankruptcy plan has been supported by almost all of AMR’s major creditors knowing that the payment in cash and stock through this merger would ensure Horton’s payment.

The shares of the company fell 16% since August 2012, the day before the announcement of decision by Justice Department.