American-US Airways merger talks reportedly close to completion

Merger talks between the parent company of American Airlines and US Airways continued Monday, with sources suggesting an announcement could be made later this week.

The union of Fort Worth-based American and Phoenix-based US Airways would create the nation’s largest airline, with a mainline fleet of nearly 1,000 planes.

The boards of the two airlines are expected to meet in the next few days to vote on the proposed merger, sources have told Reuters News.

According to the sources, US Airways Chief Executive Doug Parker would become CEO, while AMR Corp.’ chief Tom Horton would serve as non-executive chairman of the board until next year.

In 2011, American Airlines became the latest of several major carriers in the last decade to file for bankruptcy. US Airways, a smaller but more profitable carrier, has publicly advocated a merger with American to better compete against larger carriers such as Delta and United.

Sources have told Reuters and other news outlets that a merger between the two is in the works, pending negotiations to appoint a new board and management. Also delaying a final decision has been a decision on how to split the value of the new carrier among creditors and shareholders of the existing airlines.

Analysts have estimated that the two companies could generate up to $1 billion in savings and added revenue by combining forces.

“In our view, we have held that an eventual merger between American and US Airways was in the best long-term interest of both carriers,” Jeff Kauffman, an analyst at Sterne Agee, said in a report Monday.

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