American Airlines and US Airways are moving closer to a merger decision, with the board of AMR Corp. scheduled to meet on Jan. 9, people familiar with the matter said.
Teams from each carrier are discussing how to combine departments, including personnel, compensation and severance, said the people, who asked not to be identified because details are private. The talks may yet be scuttled or delayed, they said.The discussions follow AMR's efforts to reorganize in bankruptcy court, including new cost-cutting contracts with its unions, and US Airways' quest to lead a takeover to create the world's largest airline. The chief unsettled issues pending with AMR's unsecured creditors committee, which must approve any exit plan, are how to divide the equity in a new company and who would run it, three people said."It sounds like things are certainly getting close to a resolution," said Michael Derchin, an analyst with CRT Capital Group in Stamford, Conn. "It does seem like there is an inevitability about a merger, with the main issue whether they do it in bankruptcy or out."US Airways President Scott Kirby and Denise Lynn, senior vice president for people at American, have been involved in talks with pilots union representatives from each carrier, along with Jack Butler, the attorney for the creditors' panel, two people said.An agreement may be completed this week on work rules for each pilot group until a joint contract is negotiated with a merged carrier, one person said. Kirby is leading the merger analysis for US Airways Chief Executive Doug Parker, people familiar with his role have said.On Thursday, the Association of Professional Flight Attendants told members that it had signed a nondisclosure agreement so it could enter confidential discussions with American, US Airways and the creditors committee.AMR is "actively taking part in ongoing discussions" with its pilots, US Airways and the smaller airline's pilots, Michael Trevino, a spokesman, said in an e-mailed response to questions.US Airways declined to comment about meetings with AMR, said Todd Lehmacher, a spokesman for the Tempe, Ariz.-based airline.Parker, Kirby and Butler met yesterday with the board of the US Airline Pilots Association, which represents US Airways pilots, in Charlotte, N.C., said James Ray, a union spokesman. He declined to comment on the substance of the talks. Lehmacher also declined to comment.This month, AMR Chief Executive Tom Horton said the company would make a decision on a merger "soon" after pilots accepted a new cost-cutting contract.Have more to add? News tip? Tell us
