DALLAS — American Airlines and US Airways will merge and create the world’s biggest airline. The boards of both companies approved the merger late Wednesday, according to four people close to the situation.
The carrier keeps the American Airlines name but will be run by US Airways CEO Doug Parker. American’s CEO, Tom Horton, will become the chairman of the new company, the sources said. They requested anonymity because the merger negotiations were private.
A formal announcement is expected Thursday.
The deal has been in the works since August, when creditors forced American to consider a merger rather than remain independent. American has been restructuring under bankruptcy protection since late 2011.
Together, American and US Airways will be slightly bigger than United Airlines. Travelers won’t notice immediate changes. It likely will be months before the frequent-flier programs are merged, and possibly years before the two airlines are fully combined.
If the deal is approved by American’s bankruptcy judge and antitrust regulators, the new American will have more than 900 planes, 3,200 daily flights and about 95,000 employees, not counting regional affiliates. It will expand American’s reach on the East Coast and overseas.
The merger is a stunning achievement for Parker. His airline is only half the size of American and is less familiar around the world, but he prevailed by driving a wedge between American’s management and its union workers and by convincing creditors that a merger made sense.
Just five years ago, American was the world’s biggest airline. It boasted a history reaching back to the beginning of air travel. It popularized the frequent-flier program and developed the modern system of pricing tickets to match demand.
But years of heavy losses drove American and parent AMR Corp. into bankruptcy protection in late 2011. The company blamed bloated labor costs; its unions accused executives of mismanagement.