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Features - 16 may 2013

American Airlines/US Airways Merger Edges Forward

The American Airlines/US Airways merger moved a step closer to completion, when US Judge Sean Lane signed off on the proposed agreement to merge the two airlines, thereby creating the largest airline in the world, one that will have more than 100,000 workers in its employ. The signing off of the agreement came more than six weeks after Judge Lane heard the motion in a hearing during which he rejected the proposal to hand AMR Corporation CEO Thomas Horton a severance package of $20 million.

The agreement would see Horton step down as CEO of the new company, making way for US Airways CEO Doug Parker to take the reins. An objection to the hefty payout was raised by US Trustee Tracy Hope Davis on the grounds that it violates bankruptcy law limiting severance packages to executive management of bankrupt companies. Judge Lane agreed, noting that another agreement could be reached between Horton and the new post-merger company at a later stage. It’s been reported, however, that American Airlines is continuing to push for the severance to be included in the bankruptcy reorganization plan. A hearing for American Airlines to present its reorganization plan has been scheduled for June 4, after which time the airline will have sixty days to obtain approval of the deal from creditors. Despite what may seem to be a setback, American Airlines officials are confident of officially merging with US Airways by the end of September 2013.

Meanwhile a study released by the Consumer Travel Alliance is calling on antitrust regulators to investigate what effect the merger will have on competition for both connecting and nonstop flights. The study notes that up to 30 percent of US Airways’ connecting routes and 40 percent of American Airlines' connecting routes have overlap, so whereas in the past passengers would have had a choice of two airlines and competitive pricing, now there would be no choice but to use the new merged airline and pay the asking price for fares. US Airways spokesman Todd Lehmacher asserts that the new airline plans to maintain existing hubs of both airlines, with an expansion of service resulting in more choices and better service for customers.

Features

Facebook Has Positive First Quarter - 2 may 2013

Facebook's first quarter results released on Wednesday revealed that its monthly active users rose by 23 percent compared with the same period in 2012. This puts active Facebook users at 1.11 billion, with up to 751 million users accessing the network from mobile devices. An average of 665 million users visited the world's number one social media platform every day in the month of March. First quarter revenue totaled $1.46 billion, reflecting an increase of 38 percent over last year's $1.06 billion.

Features

Pre-Dispute Mandatory Arbitration Challenged - 18 April 2013

On Wednesday April 17 up to seventeen members of the North American Securities Administrators Association Inc. (NASAA) met with lawmakers in Washington to garner support for ending, or at the very least restricting, the use of pre-dispute mandatory arbitration clauses in client contracts with investment brokers. With these clauses generally being presented as standard procedure, investors may not be aware that they are, in effect, losing their right to use the judicial system in any dispute arising out of agreements entered into with brokers. In other words, they cannot sue a broker who violates the terms of the agreement or neglects to act in the best interests of a client, the investor. Critics of mandatory arbitration clauses note that investors should be given the choice of omitting the clause from an agreement, thereby giving themselves a greater measure of protection should the client/broker relationship go sour.

Markets


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