Merger of American Airlines and U.S. Airways would create largest carrier

A proposed merger between American Airlines and U.S. Airways would create the nation’s largest carrier and could be announced as soon as next week.

The two airlines have been discussing a potential deal for months and sources told ABC News that the board of directors of AMR Corp., American’s parent company, will meet on Monday to consider a possible merger.

Both airlines have declined to comment on reports that a merger is imminent. AMR Corp. filed for Chapter 11 bankruptcy in November 2011 and has been grappling with the decision to either merge or climb out of bankruptcy, remaining an independent airline.

Thomas Horton, CEO of AMR Corp., would be given an honorary position on the board, according to the proposal. U.S. Airways CEO Doug Parker will likely take over as CEO after the merger, a source told ABC News.

The newly formed airline would be based in Fort Worth, Texas, the current headquarters for AMR and United Airlines. The combined carrier is expected to retain the American Airlines name.

American Airlines and US Airways would likely merge frequent flier programs, sources said.

Both airlines serve the Milwaukee market.

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