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American, US Air merger a go after Supreme Court refuses stay request

Tom Horton, left, of AMR, and Doug Parker, right, of US Airways, announce merger plans in February. Parker will be CEO of the new company on Monday.  

Photo courtesy of Associated Press. 

Gregory Wallace

NEW YORK (CNNMoney) -- A deal to form the world's largest airline is set to be inked Monday.

The merger of American Airlines and US Airways is expected to form an air travel giant larger than the current industry leader, United Continental Holdings.

The deal cleared a series of legal hurdles, including an antitrust lawsuit this fall from the Justice Department and a last-minute challenge from a consumer group.

The airlines and Justice Department settled the antitrust suit last month, and the Supreme Court declined late Saturday to take up the challenge that the merger will lead to higher airfare and fewer choices for passengers.

American Airlines and US Airways are expected to sign the merger documents before markets open on Monday.

The new company will be called American Airlines and trade on the Nasdaq under the symbol AAL.

Passengers likely will not see effects of the merger immediately. They will continue to book flights under the American Airlines and US Airways brands. Ticketing and frequent flier programs are expected to be combined -- at the earliest -- in 2014.

To secure the deal, the Justice Department required the airlines to give up some access at two major airports. The Justice Department said this would give opportunities to low-fare airlines.

Both Southwest and JetBlue are expected to expand flights at New York's LaGuardia and Washington, D.C.'s Reagan National airports. Southwest has already said it plans to add six round-trip flights between LaGuardia and yet-to-be-announced airports.

A 2012 study by PricewaterhouseCoopers found airfares "have not increased significantly" since 2004. Since then, a series of mergers produced the landscape of major carriers that exists today.

The airlines argued the merger would provide customers more options.

American parent AMR filed for bankruptcy in 2011 but in July reported a record monthly profit.

CNN Staff

(CNN) -- The U.S. Supreme Court has cleared the way for American Airlines and US Airways to merge into world's largest airline company.

Late Saturday night, Justice Ruth Bader Ginsburg declined to hear a stay request filed by a consumer group opposing the merger.

Earlier in the day, a federal appeals court in New York also denied an emergency stay -- which prompted the consumer group to turn to the Supreme Court to block the deal.

The passenger group believes that a merger will result in higher fares and reduced choices for fliers.

With the Supreme Court removing the last roadblock, the two airlines can sign papers before the financial markets open Monday.

For the foreseeable future, though, passengers will still be booking flights under both the American Airlines and US Airways names.

Details about when the airlines will combine reservations and ticketing, frequent flier clubs and other operations are still being worked out, and those combinations are not likely until the beginning of 2014, at the earliest.

But the combined company will be the largest airline in the world in terms of revenue, passengers carried and the number of miles flown by paying passengers, surpassing United Continental Holdings, which was also formed by a merger.

CNN's Supreme Court producer Bill Mears contributed to this report.

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