Could US Airways-American Airlines Merger Go Through This Week?

The much-anticipated merger between US Airways (NYSE:LCC) and American Airlines could be right on the horizon, as two key meetings are expected to take place this week that could decide the fate of the two airlines.

The idea of a merger between the two airlines has been on the table for almost a year now, since AA went into bankruptcy, though AA’s Tom Horton had resisted the idea early on. A combination of the two airlines would create a powerful player in the air carrier industry, as it would become the largest airline by passenger traffic, exceeding Delta (NYSE:DAL) and United Continental (NYSE:UAL).

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There are still a few things that could stand in the way of the merger, but one thing that shouldn’t is the revenue potential for the combined carrier. People familiar with the merger plan said it would bring revenue and cost benefits of nearly $1 billion. On top of that, 2012 figures suggest that annual revenue could reach $38.69 billion for the merged carrier, putting it on top of United Continental by revenue.

American Airline’s creditors for the merger are meeting Monday in New York to continue prior discussions, but a lawyer for the committee wouldn’t comment. The airlines had also been expected to meet for discussions Monday, but they will likely be pushed off until Wednesday while AA finalizes details.

Though there is still the possibility of the merger falling through, it seems unlikely at this point. The strong market presence and revenue potential for the merged carrier are already clear. Additionally, the airlines have already been arranging work rules for pilots until a joint contract is negotiated, have been planning out the post-merger executive board situation, and US Airways has already boosted its earnings and profits, with news of the merger further driving up share prices.

More updates on the merger can be expected later this week, as details could be finalized as soon as Wednesday.

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