US Airways and America West closed a merger transaction on September 27 that pulled US Airways out of Chapter 11 bankruptcy and created an AWA-managed nationwide carrier described as the "first full-service, low-cost, low-fare airline". The deal was notable for its speedy completion, for raising a staggering $1.7bn in new equity investment and partner support and for its initial unenthusiastic reception by Wall Street analysts. How did the airlines manage to persuade savvy investors to part with their money, given the difficult industry environment and dismal history of large airline mergers in the US? How will they meet the challenge of labour integration? Is the new US Airways a likely long-term survivor?
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