According to the Wall Street Journal, a merger of American Airlines and U.S. Airways could be announced as early as next week.
The Journal reports the two carriers are working out the last major details of the all-stock deal.
A source said the discussions are now at an "advanced stage" with AMR CEO Tom Horton, U.S. Airways CEO Doug Parker and a small group of advisors.
But there's still an issue of who will run the new company. It's believed Parker would take the lead and Horton would take an honorary position on the board, but his exact role remains undefined.
Some of American's largest creditors support a merger saying it would enable them to recover more money in the new airline.
American's unions are already on the record as supporting a merger.
American's board of directors is expected to meet early next week to have more formal merger discussions.