Exclusive: US Air, AMR deal could come in next two weeks - sources

Fri Jan 25, 2013 5:53pm EST
 
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By Soyoung Kim

NEW YORK (Reuters) - US Airways Group Inc and American Airlines parent AMR Corp are in the final stages of negotiating a merger, with the final price and management structure still to be resolved, four people familiar with the matter said.

The two airlines, as well as AMR's creditors and its bondholders, have focused their efforts in recent weeks on reaching a merger agreement, and a deal could come in the next two weeks, the people said on Friday.

AMR's board, which has not made a final decision and still considers its own restructuring plan as a viable one to revive the airline, plans to meet on January 28 and January 29 to discuss the latest developments in the negotiations, the people said.

AMR filed for bankruptcy in November 2011 citing high labor costs. A combination with US Airways would create the world's largest airline and help the two carriers better compete with larger rivals United Continental Holdings Inc and Delta Air Lines Inc.

Negotiations are continuing and could still fall apart, but progress has been made toward getting a deal done, the people said. An alternative plan for AMR to exit bankruptcy as an independent company appears a less likely path, they added.

All the people asked not to be named because the matter is not public. US Airways declined to comment. An AMR spokesman said the carrier cannot comment on the status of the discussions.

Representatives for AMR's unsecured creditors committee and its bondholders group were not immediately reachable for comment.

The airlines have a potential structure for the board of a merged company, which would consist of members from the existing boards of US Airways and AMR, and those to be designated by AMR creditors, the people said.   Continued...

 
A US airways plane takes off behind an American Airlines jet at Ronald Reagan National Airport in Washington April 23, 2012. REUTERS/Kevin Lamarque