American Airlines, US Airways merging to form world's biggest airline

American Airlines and US Airways are set to merge under a deal that would lead to the formation of the world's biggest airline.

American AirlinesThe merger would see American Airlines move closer in value terms to rival Delta Airlines, with an estimated market valuation of $11 billion (£7billion).

The development marks a successful closure to the talks initiated in August 2012.

American Airlines' bankruptcy creditors would now own the lion's share of the new company to the extent of 72 per cent. Though the carrier would run under the American Airlines brand, the chief executive would be the current US Airways boss, Doug Parker.

"The combined airline will have the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace,'' he said in a statement.

"Our combined network will provide a significantly more attractive offering to customers, ensuring that we are always able to take them where they want to go."