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American, US Airways could be close to merger
Tuesday - 1/29/2013, 6:27pm EST
By DAVID KOENIG
AP Airlines Writer
DALLAS (AP) - More of the pieces seem to be falling into place and a picture is starting to emerge of what an American Airlines-US Airways merger might look like.
Including, who will run what could become the world's biggest airline.
Thomas Horton, the CEO of American parent AMR Corp., is in talks about becoming chairman if his company merges with US Airways, The Wall Street Journal reported, adding to indications that a deal could be close. The newspaper, citing people familiar with the matter, said the talks were still in flux and that Horton could wind up in some other role such as vice chairman if there is a merger.
US Airways Group Inc. has proposed that its chairman and CEO, Doug Parker, run the combined company.
AMR and US Airways declined to comment.
The airlines and AMR creditors are in advanced talks over a merger, but a deal is not a sure thing. The final sticking points are how much of the combined company would belong to AMR creditors and how much to US Airways shareholders, and which management team would lead it, according to people familiar with the talks.
On Tuesday two people familiar with the discussions told The Associated Press that a group of major bondholders has decided to support a merger rather than a rival plan for AMR to emerge from bankruptcy protection on its own. They spoke on condition of anonymity because the airlines are negotiating under a confidentiality agreement. The chief lawyer for the bondholders did not return messages for comment.
The bondholders, who include investors such as JPMorgan Chase & Co. and hedge funds, signaled in November that they wanted a new AMR board even if American remained independent, and that the new board should be free to pick the company's final management team.
In the last few days the bondholder group indicated that it would not remain bound by a confidentiality agreement past Feb. 15 and wanted a swift decision on a merger, increasing the sense of urgency around the negotiations, according to the people familiar with the matter.
US Airways has been pushing a merger since shortly after AMR filed for Chapter 11 protection in November 2011, but Horton has resisted the idea. He wanted to restructure his company and exit from bankruptcy before considering a merger.
However, under pressure from creditors, AMR agreed in late August to consider a merger. In the five months since, AMR and US Airways have held private talks and exchanged financial information to let the companies and AMR creditors weigh the benefits of a merger compared with an independent AMR.
American is the nation's third-biggest airline and US Airways ranks fifth. Together they would be roughly the same size as United Continental Holdings Inc. and bigger than Delta Air Lines Inc. by passenger traffic.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)