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AMR Corp. Chief Executive Tom Horton is in talks about becoming board chairman if the American Airlines parent merges with US Airways Group Inc., one of a number of signs both companies are nearing a deal that could create the world's largest airline by traffic, the Wall Street Journal reported today. The negotiations are fluid and might not result in Horton's assuming that role, as he could become a vice chairman, senior adviser, take on another role or choose to retire. Horton's future is being debated by AMR creditors and others because Doug Parker, US Airways' chairman and chief executive, is widely seen as the person who would run the combined airline as CEO. US Airways, in a November merger offer, proposed Parker assume the chief executive and chairman posts in a combined airline.

The Transport Workers Union of America, which represents ground workers at American Airlines, said yesterday that it has reached an agreement with US Airways Group Inc. and AMR Corp. that would grant immediate raises of 4.3 percent for its members should a merger of the two carriers take place, Reuters reported yesterday. The wage increase is spelled out in a memorandum of understanding reached over the past month with representatives of senior management at US Airways and American Airlines. The memo requires bankruptcy court approval and would take effect should the court approve a merger reorganization plan for American, which sought chapter 11 protection in November 2011.

US Airways Group Inc. and American Airlines parent AMR Corp. are in the final stages of negotiating a merger, with the final price and management structure still to be resolved, Reuters reported on Friday. The two airlines, as well as AMR's creditors and its bondholders, have focused their efforts in recent weeks on reaching a merger agreement, and a deal could come in the next two weeks. AMR's board, which has not made a final decision and still considers its own restructuring plan as a viable one to revive the airline, plans to meet on January 28 and January 29 to discuss the latest developments in the negotiations.

The case of the week on the Bloomberg bankruptcy video is the decision by Bankruptcy Judge Sean Lane who concluded that American Airlines is not obliged to pay several hundred million dollars in make-whole premiums even though debt would be repaid before maturity. Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss how Lane's adverse ruling evidently was expected by the debt holders who believe the result may be better on appeal, if the dispute does not become moot in the meantime. Watch here: http://www.youtube.com/watch?v=PjuIWTT7xBc

AMR Corp., the American Airlines parent restructuring in bankruptcy, won court approval for $1.5 billion in aircraft financing, defeating bondholder opposition to a plan to repay debt, Bloomberg News reported today. Bankruptcy Judge Sean Lane approved American’s request for the financing in a decision filed yesterday, overruling an objection from a noteholder trustee that said the company owes a make-whole amount. AMR, which filed for bankruptcy in 2011, sought court approval in October for the financing to take advantage of lower interest rates, saying it may save more than $200 million in interest expense. The company said it planned to redeem about $1.3 billion in debt backed by aircraft. The proposal was opposed by trustee U.S. Bancorp, which sued the Fort Worth, Texas-based airline in bankruptcy court. It said that AMR was required to pay the make-whole amount.

Pinnacle Airlines Corp. won bankruptcy court approval yesterday for agreements that it said pave the way for the regional carrier to emerge from chapter 11 as a unit of Delta Air Lines, Reuters reported. Bankruptcy Court Judge Robert Gerber signed an order that allows Pinnacle to form a restructuring accord with Delta. The carrier's reorganization plan, which will allow Delta to acquire equity in Pinnacle after Pinnacle emerges from bankruptcy, must be filed by Feb. 15. Pinnacle's new business plan calls for it to operate 81 two-class regional jets for Atlanta-based Delta.

AMR Corp., the parent company of American Airlines, reported a fourth-quarter profit yesterday following a year-earlier loss and said cost-cutting measures undertaken during restructuring would buoy earnings in future, Reuters reported yesterday. The carrier, which is weighing a merger with US Airways Group against exiting chapter 11 as a standalone company, said 2012 revenue grew 3.7 percent to $24.9 billion, its highest annual revenue ever. Net income was $262 million compared with a loss of $1.1 billion a year earlier.

The National Mediation Board said that passenger service agents at American Airlines voted against unionizing after an election that concluded yesterday, Reuters reported. Of the 5,954 workers who cast a vote, 3,052 voted for no union, compared with 2,891 who voted in favor of the Communications Workers of America, according to results from the National Mediation Board, which conducted the election from Dec. 4 to Jan. 15. There were 7,792 people eligible to vote, a spokeswoman for the U.S. agency said. The worker group includes airport agents and reservations representatives. They are the only employee group at American not unionized.

Pinnacle Airlines pilots overwhelmingly approved a concessionary contract that the company said was key to its survival, the Memphis (Tenn.)Commercial Appeal reported today. The Air Line Pilots Association said that of the more than 86 percent of eligible pilots casting ballots, 85 percent of pilots voted in favor of the agreement. The new seven-year agreement includes, among other cuts, a 9 percent reduction in pay for all pilots plus longevity caps to all pay scales which will further cut the pay of more than half of Pinnacle’s pilots by as much as another 16 percent. In addition to almost 25 percent pay cuts, the deal also increases health care costs for all pilots while reducing pilot retirement benefits by more than 50 percent for Pinnacle’s most senior pilots.

American Airlines parent AMR Corp. asked a court on Friday for more time to file a restructuring plan as part of its exit from bankruptcy, Reuters reported. American wants to submit the plan on April 1, twenty days later than the current March 11 deadline, the company said in a court filing. It would be the fifth extension granted to the company since it filed for bankruptcy protection in November 2011. The case is AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York.