Dallas-area newspapers and a Dallas TV station said the merger could be announced as early as next week. The Wall Street Journal said it could take a couple of weeks for an agreement to be completed.
The boards of both airlines did not yet announce meetings to consider the all-stock deal, but WFAA-TV, Dallas, reported the board of directors of AMR Corp., American's parent company, planned to meet Monday to consider the combination.
Creditors for AMR, which filed for Chapter 11 bankruptcy in November 2011, were expected to own roughly 72 percent of the new airline and US Airways shareholders would own about 28 percent, the Journal said.
Both airlines declined to comment.
People involved with the talks cautioned the negotiations remained fluid and could still fall apart.
Others needing to approve the merger would include creditors, American's bankruptcy judge, the U.S. Justice Department and the European Union, the Journal said.
The new company would be based in Fort Worth, Texas, American's home, but be led by US Airways, based in Tempe, Ariz.
The combined carrier is expected to retain the American Airlines name.
American recently debuted a new logo and paint scheme for its aircraft.
The new American would be led by US Airways Chairman and Chief Executive Officer Doug Parker, with AMR CEO Tom Horton becoming non-executive board chairman for at least a limited time, the news organizations said.
The Journal said there were some discussions about Horton becoming executive chairman -- a more powerful position.
If the deal is reached, the new company could have annual revenue of more than $38.7 billion and more than 100,000 employees, vaulting it ahead of United Continental Holdings Inc. as the biggest U.S. airline by traffic.
US Airways hubs in Philadelphia, Charlotte and Phoenix would be combined with American hubs in Dallas, Miami, Chicago, New York and Los Angeles, the Journal said.
Increased revenues and cost savings would mainly come from eliminating redundant back-office and operational functions, downsizing US Airways' Tempe headquarters, shrinking management, sharing airport gates and eliminating some aircraft, the Journal said.