American, US Air Close In on Merger

New firm would be world's biggest airline

By Matt Cantor,  Newser Staff

Posted Feb 7, 2013 7:19 AM CST

(Newser) – The world could soon have a new biggest airline. American Airlines' parent AMR and US Airways are ironing out a merger that would surpass national leader United Continental in traffic, insiders tell the Wall Street Journal. The merger, part of American's path out of bankruptcy, could create a firm with a market capitalization of some $10 billion. While disagreements remain, American's creditors mostly favor a deal, which would be fully stock-based—and officials hope to get it done within weeks.

As it stands, the merger would see American holding 72% of the new company and US Airways 28%. US Airways boss Doug Parker is set for the CEO position; AMR CEO Tom Horton's role is less clear, though he could be executive chairman. Staffers ranging from pilots to mechanics have been calling for such a deal. The new company would likely still be called American Airlines. For the US, the deal would mean "four healthy airlines with the right level of capacity," says an analyst. "Four big players is a very successful environment."

In this Thursday, Oct. 11, 2012 photo, the tail sections of two American Airlines passenger jets are shown as they taxi at Miami International Airport in Miami.
In this Thursday, Oct. 11, 2012 photo, the tail sections of two American Airlines passenger jets are shown as they taxi at Miami International Airport in Miami.   (AP Photo/Wilfredo Lee)
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