A deal for American Airlines and US Airways to merge is likely to be agreed on early next week, sources tell CBS News.
The board of directors of Fort Worth-based American’s parent company, AMR Corp., is slated to meet Monday to consider the agreement, and an announcement could be made the next day, CBS Dallas station KTVT-TV says.
Mark Drusch, a former executive at Delta and Continental Airlines and now the chief supply relations officer with Fareportal.com, says months of confidential discussions point to a deal. “It looks like it’s really pretty close. But never say it’s a done deal ’til it’s done,” he told KTVT.
The station has learned that American’s CEO, Tom Horton, is likely to move out of the day-to-day managing of the new combined carrier, and instead get a seat on the new board.
US Airways CEO Douglas Parker will probably run the new airline, which would be named American Airlines and is seen as likely to stay headquartered in Fort Worth.
Sources have said there were concerns that, if Horton stayed on as CEO, there could be more of the operational problems like the ones American had last fall, such as delayed and cancelled flights.
“You’re looking at what’s best for the combined company, and right now it looks like the US Airways management taking charge is what unions and creditors want,” says Drusch.
Airline analysts predict US Airways and its shareholders may get about 30 percent of the new airline, with AMR creditors getting about 70 percent.
Drusch says US Airways’ strong 4th quarter profits can’t be ignored in this deal. “At the end of the day,” he told KTVT, “the US Airways shareholders are going to get more now than they would have one year ago, six months ago, three months ago.”
Both the American and US Airways boards have to give the green light for the merger to occur. The judge overseeing AMR’s bankruptcy also has to sign off on any agreement.
Source: CBS NEWS