| NEW YORK
NEW YORK US Airways Group Inc and American Airlines parent AMR Corp are in the final stages of negotiating a merger, with the final price and management structure still to be resolved, 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'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.
AMR filed for bankruptcy in November 2011 citing high labor costs. A combination with US Airways would create the world's largest airline 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.
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 reachable 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 management led by Chief Executive Tom Horton believes the airline's creditors should own more than 70 percent of the equity in a merged airline, according to the people. It also remains unclear if Horton and the AMR board would ultimately agree to Parker taking the helm.
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, Horton has softened his approach and agreed to consider all options.
A combined American-US Airways would give American the scale to match bigger rivals that are upgrading service and expanding international routes. The merged company would have revenue of $38.69 billion based on 2012 figures, in front of United Continental which had revenue of $37.15 billion last year.
The new American would have a solid presence on the important U.S. East and West coasts and on North Atlantic routes, given American's revenue-sharing joint venture with British Airways and Iberia.
American has hubs in New York, Miami, Chicago, Los Angeles and Dallas/Fort Worth, while US Airways has key operations in Phoenix, Philadelphia and Charlotte, North Carolina.
The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.
(Reporting by Soyoung Kim; Additional reporting by Karen Jacobs and Nick Brown; Editing by Tim Dobbyn)