Friday, February 08, 2013 8:27 pm
AMR, US Airways boards close in on merger decision
By DAVID KOENIGAP Airlines Writer
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.