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American, US Airways could be close to merger

Published on NewsOK Modified: January 29, 2013 at 5:52 pm •  Published: January 29, 2013

The bondholders, who include investors such as JPMorgan Chase & Co. and hedge funds, signaled in November that they wanted a new AMR board even if American remained independent, and that the new board should be free to pick the company's final management team.

In the last few days the bondholder group indicated that it would not remain bound by a confidentiality agreement past Feb. 15 and wanted a swift decision on a merger, increasing the sense of urgency around the negotiations, according to the people familiar with the matter.

US Airways has been pushing a merger since shortly after AMR filed for Chapter 11 protection in November 2011, but Horton has resisted the idea. He wanted to restructure his company and exit from bankruptcy before considering a merger.

However, under pressure from creditors, AMR agreed in late August to consider a merger. In the five months since, AMR and US Airways have held private talks and exchanged financial information to let the companies and AMR creditors weigh the benefits of a merger compared with an independent AMR.

American is the nation's third-biggest airline and US Airways ranks fifth. Together they would be roughly the same size as United Continental Holdings Inc. and bigger than Delta Air Lines Inc. by passenger traffic.