American Airlines May Have Just Found Its Knight In Shining armour

american airlines

Photo: Flickr Matt Hintsa

US Airways is reportedly drawing up plans to merge with AMR, the bankrupt holding company of American Airlines, Bloomberg reports.The move would fill a revenue gap for US Airways, while also helping fuel American’s weakened hub system, which has been drained as it cut money-losing flights over the past several months. 

The Tempe, Arizona-based airline has already hired Barclays Capital and Millstein & Co. to advise it before bidding on American. However, it could be more than a year away from officially announcing an agreement, as it waits for AMR to navigate bankruptcy proceedings.

The rumour follows speculation that Delta, which took over Northwest Airlines over the last decade, could also enter the fray.

Under current Chief Executive Officer Doug Parker, US Airways has made a series of failed merger attempts, including one with Delta when that airline was in bankruptcy protection.

President Scott Kirby is reportedly leading the planning committee at US Airways. A company spokesperson declined to comment. 

Shares in AMR are up more than 5% on the news, to $0.45.

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