American yet to realise US Airways merger benefits

American Airlines may have yet to realise the full revenue benefits of its 2013 merger with US Airways, suggests Moody's Investors Service in a new report. "American's inferior operating margins imply that the company has yet to capture the operating benefits of the 2013 merger with US Airways," the rating agency said in a credit opinion on 21 May. Moody's expects the Fort Worth, Texas-based carrier's operating margin to lag peers Delta Air Lines and United Airlines by at least 350 basis points in 2019, it says. It cites American's significantly smaller international network – it only represented roughly 27% of revenues in 2018, compared to around half at its competitors – among reasons for this discrepancy. American's pre-tax operating margin was 2.3% for the first quarter, its financial statements show. Delta reported a pre-tax operating margin of 9% and United 3.8%. The suggestion that the American-US Airways merger has not lived up to its promises is likely to raise questions. When the carriers announced their merger on Valentine's Day in 2013, then-US Airways chief executive Doug Parker now chief executive of American and then-American chief executive Tom Horton outlined $1.05 billion in annual revenue synergies from the deal, a forecast that was raised to $1.45 billion by the beginning of 2014.