Airline merger may be near at boards meet

The board of directors of US Airways gathered Wednesday in Tempe, Ariz., while the board of directors of American Airlines gathered in Ft. Worth, Tex., apparently so both could review a deal for the two airlines to merge.

If both boards like the deal, they can vote for it, and it could be announced Wednesday or Thursday, the Wall Street Journal reported, citing sources close to the negotiations, after the Reuters news agency on Sunday reported a deal could be announced within a week.

News reports on the mainland said the deal was shaping up to be an acquisition of larger AMR Corp., now in bankruptcy, by smaller but solvent US Airways, with US Airways Chairman and CEO Doug Parker, the driving force behind the deal, becoming CEO, while American CEO Tom Horton becoming non-executive chairman, with 72 percent ownership of the combined company going to American Airlines creditors.

Board meetings were originally scheduled for Monday but postponed, apparently as final details were ironed out. The creditors' committee of AMR Corp. did meet in New York on Monday but made no announcement. Parker, who secured conditional labor agreements with American's big three labor unions, said weeks ago that the combined airline would be called American Airlines and would still be headquartered in Ft. Worth, Tex.

As the deal neared, more potential effects came to light. Allegiant Air Treasurer Jude Bricker told the Reuters news agency Tuesday that he expected the combined carrier would retire its MD-80 jetliners, making spare parts more readily available for the MD-80s Allegiant flies.

The Charlotte Business Journal reported Monday that the merger would probably lead to some job cuts, but the largest US Airways hub, in Charlotte, would likely continue to employ more than 7,000 people.

But the Winston-Salem Journal reported there is concern among the 850 people who work the 24-hour US Airways call center in Winston-Salem, N.C. American Airlines employs more than 1,000 call center workers in North Carolina as well.

American Airlines has daily nonstop from its headquarters hub at DFW to Honolulu, but most of its service, including daily flights to Lihue, Kahului and Kona as well as Honolulu, take off from Los Angeles. US Airways serves all four airports from its western hub at Phoenix.

A key supporter of the merger behind the scenes was American's Star Alliance, who other members, including British Airways, saw benefit for them in the extensive U.S. route network that US Airways would bring to the table. One of the big reasons to belong to an alliance is to sell code share tickets to destinations one doesn't serve oneself.

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