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American Airlines parent AMR Corp. and US Airways Group Inc. are hashing out the last major details of a merger agreement that would create the world’s largest airline and are racing to finalize a deal within the next week or two, said people close to the discussions.

If the deal is reached, the new company could have a market capitalization of more than $10 billion and would vault ahead of United Continental Holdings Inc. UAL +4.37% as the biggest U.S. airline by traffic. The all-stock deal would be executed as a reorganization plan that takes American out of Chapter 11 bankruptcy protection.

From NBC 5 Dallas: The two  have made tentative plans to announce a merger early next week…the announcement could come as early as Tuesday morning.

Photo Credit: A merged American Airlines, albeit with its new livery, would likely take US Airways into the Oneworld alliance with members such as Iberia and British Airways. American Airlines