US Airways Merger with American Airlines Gets Big Push from ARM Bondholders

With its parent company, ARM, under Chapter 11 bankruptcy protection, the potential merger between airline giants American Airlines and US Airways have picked up steam.

According to Bloomberg News, citing unnamed "people familiar with the matter" states one key group of ARM bondholders is backing the merger.

"The bondholders coalesced behind the idea after reviewing confidential data from AMR's American Airlines and US Airways, said the people, who asked not to be identified because the talks are private. The promise of more cost savings and other financial benefits from a combined carrier than a stand-alone American helped sway the group, one of the people said," reported by Bloomberg News.

Piggybacking off a Reuters report, Bloomberg said, "the ownership stake and makeup of the merged airline's management teams remain sticking points in the current merger talks between US Airways and American."

"American's stand-alone restructuring plan remains an option should the talks fall apart, but all parties are focused on trying to reach a merger agreement, the people said," according to the Wall Street Journal.

"The companies and American creditors are exchanging term sheets for a so-called 'plan support agreement' that would spell out the merger as American's bankruptcy reorganization plan that gets presented to a judge, the people said. Creditors have stressed that they would want to select a new board even if American remains independent, and would insist on a management team that maximizes value for shareholders," according to The Wall Street Journal.

The Wall Street Journal also reports that Tom Horton, CEO of ARM, is in discussions to be the board chairman of the new American Airlines and US Airways company.

This doesn't mean he will get the job, he could chose to retire, but the outcome of the meeting is a crucial one for the 51-year-old Horton-with current CEO of US Airways, Doug Parker, also 51 years old, reportedly having the inside track, due to US Airways mandating that any merger include Parker and assuming that he will appoint current US Airways' President, Scott Kirby, as his No. 2 man, Horton could be jobless.