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US Airways Group, Inc. (LCC): This May Be the Worst Company… Ever!

Even history acts as a precursor to warn us that airline-ocalypse will be upon us if these two get together. AMR and US Airways have combined for three bankruptcies since 2002 and, also noted by Adam, the United Continental Holdings Inc (NYSE:UAL) merger, which was expected to show substantial synergies, actually wound up costing the combined entity in 2012, as opposed to saving it money. US Airways projects revenue synergies of $1.2 billion, but fails to account for the bonuses AMR workers will likely demand and the technological integration needed for such large companies. It’d be years before we’d see any significant synergies.

As one final wild card, let’s not forget what’ll happen to AMR once its lease financing, totaling $13 billion, runs out for its 460-plane, $38 billion order and it has to begin paying for the new planes out of pocket.

I won’t jump to any conclusions until I see what bondholders have to say about a prospective merger with AMR next week, but I feel very strongly that this combined entity will be as toxic an investment as I’ve ever seen.

The article This May Be the Worst Company… Ever! originally appeared on and is written by Sean Williams.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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