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Report: AA, US Airways Approve Merger

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The boards of American Airlines and US Airways both on Wednesday approved a merger deal, NBC 5 has learned.

Sources tell NBC 5 that a formal announcement is not expected until Thursday.

Under the widely reported merger scenario that has been described to NBC 5, US Airways CEO Doug Parker would run the combined airline. American CEO Tom Horton would be named non-executive chairman for a period of one or two years.

The new airline would keep its headquarters in Fort Worth, Texas. The company would also keep the American brand, with the US Airways name to go away.

The Wall Street Journal first reported that both boards had voted on Wednesday to approve the merger.

The deal has been in the works since August, when creditors forced American to consider a merger rather than remain independent. American has been restructuring under bankruptcy protection since late 2011.

Together, American and US Airways will be slightly bigger than United Airlines. Travelers won't notice immediate changes. It will likely be months before the frequent-flier programs are merged, and possibly years before the two airlines are fully combined.

If the deal is approved by American's bankruptcy judge and antitrust regulators, the new American will have more than 900 planes, 3,200 daily flights and about 95,000 employees, not counting regional affiliates. It will expand American's current reach on the East Coast and overseas.

The merger is a stunning achievement for Parker, who will run the new company. Parker's airline is only half the size of American and is less familiar around the world, but he prevailed by driving a wedge between American's management and its union workers and by convincing American's creditors that a merger made business sense.

Just five years ago, American was the world's biggest airline. It boasted a history reaching back 80 years to the beginning of air travel. It had popularized the frequent-flier program and developed the modern system of pricing airline tickets to match demand.

But years of heavy losses drove American and parent AMR Corp. into bankruptcy protection in late 2011. The company blamed bloated labor costs; its unions accused executives of mismanagement.

NBC 5's Scott Gordon contributed to this report.



Photo Credit: NBC 5

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