AMR, US Airways boards close in on merger decision
Posted:
Updated:
By DAVID KOENIG AP Airlines Writer
DALLAS (AP) - The boards of American Airlines
parent AMR Corp. and US Airways could decide early next week whether to
merge their two companies and create an airline rivaling the world's
biggest.
The AMR board is scheduled to meet Monday, and
directors of US Airways Group Inc. planned to meet over the weekend or
Monday, people close to the matter said on Friday.
The two sides have been trying to resolve two major
outstanding issues - the division of ownership and management roles,
according to the people, who spoke on condition of anonymity because the
talks are private.
Negotiators have settled on a split that would give
slightly more than 70 percent of the new company's stock to AMR
bankruptcy creditors and the rest to US Airways shareholders, said one
person.
US Airways CEO Doug Parker would run the new
company, which would keep the American Airlines name. But the exact role
for AMR CEO Tom Horton has not been settled, said three of the people.
He could be named non-executive board chairman, they said.
Citing people familiar with the discussions,
Bloomberg News reported that Horton's tenure in that position would only
last one or two years.
An announcement is possible as early as Tuesday but
could be delayed. The two sides are rushing to complete a deal by next
Friday. That's when a key group of AMR bondholders who support a merger
will no longer be restricted by the confidentiality agreement that has
prevented the parties from discussing the talks.
AMR and US Airways declined to comment on the talks.
American is the nation's third-biggest airline and
US Airways ranks fifth by passenger traffic. Together, they would be
bigger than current world leader United Continental Holdings Inc.,
although United would remain slightly larger if regional operations such
as United Express and American Eagle are counted.
US Airways is the product of a 2005 merger with
America West, which was smaller but controlled the deal and took over
the bigger company's name. It has been pursuing a merger with American
since shortly after AMR filed for bankruptcy protection in November
2011.
AMR sat out the last several rounds of
consolidation in the airline industry and lost its perch as the world's
biggest airline in 2008. Its last major acquisition was TWA, which was
bankrupt at the time, in 2001.
___
Associated Press Airlines Writer Joshua Freed in Minneapolis contributed to this report.
Copyright 2013 The
Associated Press. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed.
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