American Airlines and US Airways Merger: Is This Finally Happening?

US Airways PlaneSince American Airlines parent AMR Corp. (AAMRQ.PK) filed for Chapter 11 bankruptcy protection in 2011, analysts and investors have been closely following the will-they-won’t-they drama of US Airways’ (NYSE:LCC) courtship of the downtrodden air carrier. Now it seems like a deal for American Airlines and US Airways to merge may be imminent, according to a CBS News report.

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The board of directors at AMR will meet Monday to consider a merger agreement, and could announce their decision as soon as the next day, according to CBS Dallas station KTVT-TV.

Calling the game before it’s over is always a gamble, but that didn’t stop investors from bidding up US Airways today on the news. Shares closed 3.71 percent higher following reports that the much-anticipated merger might finally go through.

Analysts are predicting US Airways and its shareholders may get about 30 percent of the new airline, with AMR creditors getting the other 70 percent…

Mark Drusch, a former executive at Delta (NYSE:DAL) and Continental Airlines (NYSE:UAL) and now the chief supply relations officer with, says US Airways’ strong fourth-quarter profits can’t be ignored in the deal. “US Airways shareholders are going to get more now than they would have one year ago, six months ago, three months ago.”

In what could prove the biggest merger of the year, shareholders on both sides stand to win big as the two airlines merge to become the world’s biggest airline. Now that’s something Douglas Parker’s mom can put on a bumper sticker, as the US Airways chief will likely be asked to take the helm, while American CEO Tom Horton is likely to be moved out of the day-to-day managing of the carrier, probably instead being moved to a seat on the new board.

Sad for Horton’s mom, but it’s probably for the best — American shareholders will likely rejoice in having US Airlines’ management team steering the ship after a year and a half of rough seas. After all, while under Horton’s leadership, American experienced numerous operational issues last fall, including delayed and cancelled flights.

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