ATSB Clears US Air Merger

The company and America West needed permission because both have loans backed by ATSB guarantees.
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America West



US Airways


cleared another hurdle to their planned merger by getting the federal Air Transportation Stabilization Board to sign off on it.

Permission was necessary because both airlines have loans backed by ATSB guarantees. The ATSB was established in the wake of the Sept. 11, 2001, terror attacks to assist the airline industry with loan guarantees.

America West and US Airways announced their merger on May 19, saying it would create a full-service nationwide airline with discount prices. The plan would significantly increase America West's scale and lift US Airways out of Chapter 11 bankruptcy protection. But analysts have said it faces significant challenges, including meshing two labor groups with different seniority levels.

The airlines expect to close their merger this fall.

America West on Thursday announced a second-quarter profit that beat Wall Street's expectations. US Airways has yet to say when it will report its second quarter.