The boards of US Airways and American Airlines parent AMR Corp. are said to be close to a deal to merge the companies and create an airline that would be one of the world’s largest. The AMR board is set to meet Monday and the directors of US Airways Group are scheduled to meet over the weekend or Monday.
The two companies have been trying to resolve two major issues of the merger, which are the division of ownership and management roles. Negotiators have compromised on a split that would give a little more than 70 percent of the new company’s stock to AMR bankruptcy creditors and the rest to US Airways shareholders.
American is the third largest airline in the US and US Airways is the fifth according to passenger volume. When combined, the resulting company would be bigger than the current world leader United Continental Holdings although United would still remain slightly bigger if regional operations are considered.
An official announcement of the merger is expected as early as Tuesday but it could be delayed. The two companies are trying to come with an agreement by Friday. That’s the day when a key group of AMR bondholders who support a merger will not be restricted by the confidentiality agreement that has prevented the companies to discuss the merger in public.
US Airways is the result of a 2005 merger with America West, which was a smaller but controlled the deal and took over the larger company’s name. The company has since trying to merge with American after AMR filed for bankruptcy protection in November 2011.
