| NEW YORK
NEW YORK US Airways Group Inc and American Airlines parent AMR Corp are in the final stages of negotiating a merger, with valuation and management structure being the two major sticking points left to resolve, four people familiar with the matter said.
The two airlines, as well as AMR's creditors and its bondholders, have focused their efforts in recent weeks on reaching a merger agreement, and a deal could come in the next two weeks, the people said on Friday.
AMR filed for bankruptcy in November 2011 citing high labor costs. A combination With US Airways would create one of the world's largest airlines and help the two carriers better compete with larger rivals United Continental Holdings Inc and Delta Air Lines Inc.
Negotiations are continuing and could still fall apart, but progress has been made toward getting a deal done, the people said. An alternative plan for AMR to exit bankruptcy as an independent company appears a less likely path, they added.
AMR's board, which has not made a final decision and still considers its own restructuring plan as a viable one to revive the airline, plans to meet on January 28 and January 29 to discuss the latest developments in the negotiations, the people said.
All the people asked not to be named because the matter is not public. US Airways declined to comment. An AMR spokesman said the carrier cannot comment on the status of the discussions.
Representatives for AMR's unsecured creditors committee and its bondholders group were not immediately reached for comment.
The airlines have a potential structure for the board of a merged company, which would consist of members from the existing boards of US Airways and AMR, and those to be designated by AMR creditors, the people said.
Negotiations have now largely come down to how the equity of the combined company would be split between shareholders of US Airways and creditors of AMR, and who will run the merged airline, according to the people familiar with the matter.
US Airways' formal merger offer made in November, which calls for its chief executive, Doug Parker, to run the combined airline, proposed that AMR creditors own 70 percent of the equity and shareholders of US Airways own the rest, the people have said.
AMR Chief Executive Tom Horton rebuffed an aggressive takeover push from US Airways early in the bankruptcy process, saying the airline preferred to exit court protection on its own and consider a deal later.
But after several months of talks with its own creditors as well as US Airways and AMR's creditors, Horton has softened his approach and agreed to consider all options.
(Additional reporting by Nick Brown and Karen Jacobs)