Airlines one step closer to merger

Published Dec 8, 2012 at 04:00AM

DALLAS — American Airlines is closer to exiting from bankruptcy and possibly merging with US Airways after its pilots approved a new labor contract.

With the pilots’ deal announced Friday, American has negotiated new, lower-cost contracts with all its unions since filing for bankruptcy protection just over a year ago.

Company executives insist the savings will let American compete as an independent airline. But rival US Airways has been pressing to merge, arguing that both must get bigger to succeed against huge rivals United and Delta. And US Airways executives want to run the combined company.

American and US Airways will keep talking about a potential deal. Thomas Horton, the CEO of American parent AMR Corp., said Friday that his company could make a decision soon.

But with AMR in bankruptcy, it could be its creditors who make the call. The pilots’ contract was the last big unknown in American’s restructuring, and creditors are likely to turn now to whether they would make more money if American merges or remains on its own.