American Airlines is closer to exiting from bankruptcy and possibly merging with US Airways after its pilots approved a new labour contract.
With the pilots' deal announced at the weekend, American has negotiated new, lower-cost contracts with all its unions since filing for bankruptcy protection just over a year ago.
Company executives insist the savings will let American compete as an independent airline.
But its competitor US Airways has been pressing to merge, arguing both must get bigger to succeed against their huge rivals United and Delta. And US Airways executives and the unions want to run the combined company.
"This contract represents a bridge to a merger with US Airways," said Dennis Tajer, the pilots' union Allied Pilots Association spokesman. He said the vote "should not in any way be viewed as support for the American stand-alone plan or for this current management team".
American and US Airways will keep talking about a potential deal. Thomas Horton, the chief executive of American parent AMR, said on Friday his company may make a decision soon.
But with AMR in bankruptcy, it could be its creditors who make the call.
The pilots' contract was the last big unknown in American's restructuring and creditors are likely to turn now to whether they would make more money if American merges or remains on its own. The APA announced 74 per cent of its members voted to ratify a new contract three months after they rejected a similar offer. Union leaders lobbied hard for passage the second time around.
They want a merger and believe that Friday's vote made a deal more likely.
AMR leaders have seemed to favour emerging as an independent airline before considering a merger. On Friday, they hailed the pilots' vote as a key step in AMR's turnaround after years of heavy losses.
In a message to employees, Mr Horton called the deal an important milestone and said AMR is nearing the end of its restructuring.
He said AMR was also wrapping up its study of whether to remain independent or merge with US Airways. He said he was "confident the new American will be very strong" but was still evaluating the merits of a merger.
"We expect to have a conclusion on this soon," he said.
US Airways declined to comment, citing a confidentiality agreement it signed with American when the two began talks several weeks ago.
US Airways has proposed a merger that would give AMR creditors 70 per cent of the combined company, which would be run by Doug Parker, the US Airways chief executive, according to a person familiar with the discussions and who spoke on condition of anonymity.
There have been reports AMR might seek up to 80 per cent for its creditors, which could be unacceptable to US Airways Group shareholders, the person said.
* AP