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America Airlines, U.S. Airways merger imminent, reports suggest

As soon as next week, American Airlines and U.S. Airways could announce their intent to merge, according to a report in the Fort Worth Star-Telegram.

The two airlines have been talking about a merger for months, according to various reports, and previously “completed discussions” with two major employee unions: the Allied Pilots Association and US Airline Pilots Association. These discussions ware aimed at developing “a framework for the terms of employment for pilots, as well as a process for pilot integration, in the event of a merger,” the airlines previously said.

AMR Corp., which owns American and American Eagle, filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York in November 2011. American was working on a plan to emerge as a stand-alone carrier, and if the merger should fall through, it could remain so.

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

The new airline would be based in Fort Worth, Texas, and continue under the American name, according to a report from the NBC affiliate in Dallas-Fort Worth. The boards of both airlines must formally approve the merger.

U.S. Airways is the nation’s fifth largest airline while American Airlines is the nation’s fourth largest. The merger is expected to result in the world’s largest airline, based on the number of passengers carried annually.

The merger would allow the new airline to better compete against larger rivals, including Atlanta-based Delta Air Lines.

Last April, U.S. Airways announced it had the buy-in from three major unions representing 55,000 American Airlines employees: the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA), and the Transport Workers Union (TWU).

During remarks before the National Press Club last July, U.S. Airways Chairman and CEO Doug Parker said airline mergers have resulted in better networks and profitable airlines, citing mergers between United and Continental; Southwest and AirTran; America West and U.S. Airways; and Delta and Northwest, which resulted in the nation’s largest airline.

Based in Tempe, Arizona, U.S. Airways employs more than 32,000 people and operates more than 3,000 daily flights. Based in Fort Worth, Texas, American Airlines employees more than 87,000 people and operates more than 3,400 daily flights.

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