US Airways and American Airlines Merger Approved

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US Bankruptcy Judge Sean Lane approved the planned merger of AMR Corp and US Airways Group. The decision is one step closer to building the world's largest airline.

The whole matter though was not approved as the judge disapproved the planned severance package for outgoing CEO Tom Horton amounting to US$19.9 million. He said that he is unsure whether he needs to approve of the package or it is better left decided on during the formal restructuring.

For its part, AMR and US Airways issued a joint statement lauding the approvals made by the US judge. They said, "We are gratified to know that he considers the merger an 'excellent' result for stakeholders."

It must be remembered that the planned merger came after AMR sought bankruptcy protection. It cited prohibitive labor costs after years of attempts to negotiate with its unionized workforce for cost savings purposes. AMR initially opposed the merger but accepted later on after pressure from its creditor committee as to the viability of the plan.

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