Under an all-stock merger that US Airways proposed in mid-November at a meeting with AMR's unsecured creditors committee, AMR creditors would own 70 percent of the merged company and US Airways shareholders 30 percent, the people said. US Airways and AMR are negotiating toward a potential merger agreement that the smaller rival hopes could come as soon as January, one of the people added, asking not to be named because the matter is not public.
The combined AMR and US Airways could have a value similar to Delta Air Lines Inc, which has a market capitalisation of around $8.5 billion, the person said. At the same time, AMR is still pursuing a plan to emerge from bankruptcy proceedings as an independent airline, which will be compared against the merits of a merger with US Airways, the people said.
The companies have yet to narrow differences on a number of significant issues before any deal could be agreed, including how much of the combined carrier each side should own, the people said. AMR creditors think they should get an equity stake of closer to 80 percent in a merged entity, rather than the 70 percent proposed by US Airways, the people said. AMR and US Airways also disagree on potential cost and revenue benefits from a merger as well as labour integration challenges, they added. In a note to American Airlines workers, AMR CEO Tom Horton said the company is weighing whether a merger could "create value for our owners and a positive outcome for our people and our customers. We expect to have a conclusion on this soon."