American Airlines and US Airways are poised to announce a merger within the next few days according to reports in the US.
The two US carriers are set for an $11 billion merger which would create the world’s biggest airline ahead of domestic rivals Delta and United, which have previously merged with Northwest and Continental respectively in the last few years.
American, which has been in bankruptcy protection since November 2011, and US Airways have been in merger talks for several months.
Any deal would have to be approved by US competition authorities and business travel groups in the US such as the Business Travel Coalition have warned that the merger could lead to higher fares and less competition within North America.
It is unclear what impact any merger will have on British Airways’ joint venture with American across the Atlantic. BA’s parent company IAG has previously expressed an interest in taking a minority shareholding in American.
Final details of the American-US Airways deal are still being discussed, but Reuters reports that US Airways CEO Doug Parker is to become boss of the new airline with American’s CEO Tom Horton acting as chairman of the board.
The deal between American and US Airways will not involve any cash with creditors of American’s parent company AMR set to get 72 per cent of the new airline and the rest going to US Airways.