American Airlines, U.S. Airways Reach $11 Billion Merger Deal

Staff and Wire Reports

It appears that a merger between American Airlines and U.S. Airways has been given clearance to take off.

The two carriers announced the deal this morning, putting value of the merger at $11 billion. The combined carrier will eventually be called American Airlines and will rank as the world's biggest airline.

But even though American Airlines and US Airways have announced plans to merge, it will be several months -- if not years -- before passengers see any significant impact.

American's parent company is under bankruptcy protection, and a court will have to approve the deal. US Airways shareholders also need to sign off on it -- as do the Department of Transportation and the Justice Department.

Bloomberg News reported the board of directors for American Airlines and US Airways were working out a tentative agreement on a merger.

The Associated Press reported Monday that the companies were trying to finish a deal before Friday, when a confidentiality agreement covering some AMR bondholders expires. That could result in public disclosure about negotiation details.

AMR has been operating under bankruptcy protection since November 2011.

US Airways has pushed for months for a merger. AMR executives were initially reluctant, but the company's bankruptcy creditors urged AMR to consider a merger that they could compare to an independent American Airlines.