American, US Airways boards approve merger: source

NEW YORK: The boards of American Airlines and US Airways approved a merger Wednesday to create the largest US airline once American exits bankruptcy court, sources close to the negotiations said.

The merger will be formally announced Thursday morning, these people told AFP. The newly-formed company, keeping the name American Airlines, will be headquartered in American's Dallas-Fort Worth base in Texas.

The deal comes on the heels of a series of other recent airline mergers that have remade the US airline industry and better positioned the sector for profit.

One of the sources close to the talks said the bigger scale of the company would enhance American's value after bankruptcy better than a free-standing American Airlines.