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US Airways eyes $8bn Delta merger US Airways eyes $8bn Delta merger
(about 3 hours later)
US Airways has made a $8bn (£4.2bn) offer to merge with rival Delta Air Lines, in a deal that would create one of the world's largest airlines.US Airways has made a $8bn (£4.2bn) offer to merge with rival Delta Air Lines, in a deal that would create one of the world's largest airlines.
Under the terms of the deal, both airlines would combine once Delta emerged from bankruptcy protection.Under the terms of the deal, both airlines would combine once Delta emerged from bankruptcy protection.
The cash and stock offer would give Delta's unsecured creditors $4bn in cash and 78.5 million shares of US Airways stock.The cash and stock offer would give Delta's unsecured creditors $4bn in cash and 78.5 million shares of US Airways stock.
If the deal goes ahead, the airline will operate under the Delta name.If the deal goes ahead, the airline will operate under the Delta name.
It would serve more than 350 destinations across five continents, and, according to US Airways, be the biggest carrier across the Atlantic.
Pay cutsPay cuts
News of the bid led to sharp rises in both companies' share prices.
It would serve more than 350 destinations across five continents, and, according to US Airways, be the biggest carrier across the Atlantic.
US Airways recently joined forces with American WestUS Airways recently joined forces with American West
US Airways said it hoped the combined airline would generate annual synergies of at least $1.65bn.US Airways said it hoped the combined airline would generate annual synergies of at least $1.65bn.
The deal would lead to a 10% cut in the overall capacity of both airlines, and reduce the number of unprofitable flights, US Airways said.The deal would lead to a 10% cut in the overall capacity of both airlines, and reduce the number of unprofitable flights, US Airways said.
Delta Air Lines filed for Chapter 11 bankruptcy protection in September last year, amid high fuel prices and cut-throat competition.Delta Air Lines filed for Chapter 11 bankruptcy protection in September last year, amid high fuel prices and cut-throat competition.
In December, pilots at Delta voted to approve a 14% pay cut to help keep the firm trading.In December, pilots at Delta voted to approve a 14% pay cut to help keep the firm trading.
US Airways was itself formed from the merger last year of the struggling airline of the same name and smaller rival American West.US Airways was itself formed from the merger last year of the struggling airline of the same name and smaller rival American West.