The planned merger between American Airlines and US Airways has moved a step closer after the deal was approved by American’s bankruptcy judge.
Judge Sean Lane, sitting in New York yesterday (March 27), gave the green light to the $11 billion merger which will create the world’s largest airline when it is completed.
American and its parent company AMR have been in chapter 11 bankruptcy protection since November 2011.
The company still has to put together a formal restructuring plan which includes the merger with US Airways. This plan has to be approved by the bankruptcy court and American’s creditor
The planned merger also has to be approved by competition authorities in the US. The two airlines expect the tie-up to be completed in the third quarter of 2013.
During the hearing, the judge questioned a $19.9 million severance pay package for American’s current CEO Tom Horton who will leave the business following the completion of the merger. The judge did not approve this settlement and it is now likely to be included in American’s formal restructuring proposal.
For more details of the proposed merger, click here