American Airlines, US Airways boards vote to merge, sources say
FORT WORTH — The deal is finally done.
On Wednesday, the boards of directors for both AMR Corp. and US Airways Group approved a definitive agreement to merge the two carriers, sources close to the deal said.
An announcement is scheduled for Thursday morning at Dallas/Fort Worth airport in the American Airlines' Admirals Club, said the sources, who declined to be identified.
The merger will produce the largest airline in the United States, bumping United Continental out of the top spot, with combined revenues of $38.7 billion and close to 100,000 employees.
The deal will need to be approved by the bankruptcy judge and by federal regulators before AMR, American's parent company, can exit Chapter 11 bankruptcy protection.
AMR's board met in New York and voted unanimously to approve the merger, the sources said. A bankruptcy filing is expected on Thursday regarding the deal.
Details of the merger have not been released. But the sources said that AMR chief executive Tom Horton will become non-executive chairman of the new carrier until its first shareholder meeting, likely in mid-2014. US Airways CEO Doug Parker will become chief executive of the merged airline.
The deal is likely to include a 72 percent equity stake for AMR creditors, while US Airways shareholders will receive 28 percent of the equity in the new company, sources said, adding that AMR common shareholders will get a percentage of AMR's equity portion of the merger.
According to The Wall Street Journal, the board of the new company will have 12 directors, with five appointed by American's creditors, three appointed by American and four appointed by US Airways.
US Airways has been pushing for a merger since last spring, winning the support of American's unions and creditors.
Meetings have been going on for weeks as executives at both companies, along with American's unsecured creditors committee and an ad hoc bondholder group, tried to reach a deal before the Feb. 15 expiration of a nondisclosure agreement with bondholders.
AMR had previously asked the court to extend its deadline until late April to submit a reorganization plan, which suggested that talks could have stretched past this week.
With the merger, American will get more market share on the East Coast, where it has lost business in recent years to carriers like JetBlue. US Airways' hubs in Charlotte and Philadelphia will also bolster American's north-south traffic on the East Coast.
For US Airways, the merger gives it access to more international routes and partners through the Oneworld alliance.
US Airways is a member of the Star Alliance but does not have the full benefits.
where United has better joint ventures with international partners.