American Airlines, US Airways Merger Could Be Near

PHOTO: American Airlines Inc. and United Continental Hoildings planes taxi on the runway at LaGuardia Airport in Queens, New York, Nov. 21, 2012.
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A possible merger between American Airlines and U.S. Airways that would create the nation's largest carrier could be in the works and announced as soon as next week.

The two airlines have been discussing a potential deal for months and sources tell ABC News affiliate WFAA that the board of directors of AMR Corp., American's parent company, will meet on Monday to consider a possible merger.

Nothing has been decided and no actual deal is in place, a source told ABC News. That doesn't mean a deal can't be hammered out between the two airlines.

Both airlines have declined to comment on reports that a merger is imminent. If a deal is reached, the new airline would become the largest in the U.S.

AMR Corp. filed for Chapter 11 bankruptcy in November 2011 and has been grappling with the decision to either merge or climb out of bankruptcy, remaining an independent airline.

Thomas Horton, CEO of AMR Corp., would be given an honorary position on the board such as non-executive chairman and US Airways CEO Doug Parker will likely take over as CEO after the merger, a source told WFAA.

The newly formed airline will be based in Fort Worth, the current headquarters for AMR and United Airlines. The combined carrier is expected to retain the American Airlines name.

In the short-term, travelers will see virtually no changes from either airline if a merger is announced.

"This deal still has to go through significant regulatory scrutiny and it will take some time before anything of any note changes," Genevieve Shawn Brown, ABC News lifestyle and travel editor, said.

American Airlines and US Airways would likely merge frequent flier programs, Brown said.

Longer term, the merger could mean higher prices.

"In the last five years the U.S. has gone from six legacy carriers to four. If this merger goes through we will be down to three legacy carriers. Less competition generally means higher airfares," Brown said.

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