Three-Week Delay in AA's Merger Decision
No decision on combining with US Airways expected this week
By Scott Gordon
Scott Gordon, NBC 5 News
The AMR Board of Directors is not expected to vote on a proposed merger with US Airways at its meeting this week, according to a person with knowledge of the high-level negotiations.
The board of directors of American Airlines' parent company, AMR Corp., was set to vote on a consensual merger with US Airways this week but asked for a three-week delay, a person with knowledge of the high-level negotiations told NBC 5.
The board meets on Wednesday.
The delay to better evaluate US Airways' offer would move the decision to the last week of January, the person said.
"I think they're not going to be able to stop it at this point," said Vicki Bryan, an analyst with Gimme Credit. "Just because American Airlines management team wants to delay it, that doesn't mean they'll be able to delay it."
Bryan was among the first to predict American Airlines' bankruptcy in November 2011.
Pilots, flight attendants and some creditors are already on board with a merger. By some estimates, a merged airline would be worth $1 billion more to creditors than a standalone airline.
Overnight, the new airline would become the world's largest.
"Everyone will be happy to see this process end and the future beginning," Bryan said. "Cobbling together a $40 billion airline is not something you knock together in a garage. It's a tough process."
Bryan said US Airways management would likely win control of the new company. Under this scenario, American Airlines CEO Tom Horton and other top executives would be pushed aside.
US Airways has said it would keep the American brand and keep its headquarters in Fort Worth.
Among the hurdles to a merger -- how much US Airways should pay and how much creditors should get.
US Airways offered creditors 70 percent equity in a new airline with 30 percent going to US Airways shareholders, analysts say. Creditors want 80 percent.
Whatever the final numbers, the growing consensus is a merger will happen soon, setting the stage for yet another battle.
"They've got their work cut out for them because Delta and United are not going to wait around for American Airlines to sort itself out," Bryan said. "They are going to step into a world-class competition on a scale no one has ever seen."
American Airlines spokesman Bruce Hicks declined to comment on the board meeting or even confirm the meeting was taking place.
