American Air's stock set to rise on optimism
It is hoped carrier can avoid common pitfalls of mergers
Add BT as a preferred source[DALLAS] American Airlines Group Inc, which was formed yesterday when AMR Corp and US Airways Group Inc combined, is poised to rise on confidence that the world's largest carrier can avoid the pitfalls that dragged down other mergers.
The stock may reach US$39 by 2015, estimated Hunter Keay, a Wolfe Research Inc analyst, while Jamie Baker of JPMorgan Chase & Co sees Fort Worth, Texas-based American rising to US$37. Holders of US Airways, which closed last week at US$22.55, will get shares of the new company in a one-for-one exchange.
Doug Parker takes the helm as chief executive officer with lessons learned in creating the current US Airways in a tie-up with America West Holdings Corp in 2005. As he seeks US$1 billion in new revenue and savings, he plans to smooth technology bumps by using the reservation system at AMR's American, the bigger airline, and has union accords in place to ensure labour peace and predictable costs.
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