HOUSTON, A U.S. judge on Wednesday approved the merger of American Airlines and U.S. Airway, a move that clears the way for the two carriers to form the world’s biggest airline.

But Judge Sean Lane declined to authorize a proposed severance package worth nearly 20 million U.S. dollars for Tom Horton, the outgoing chief executive of AMR, parent of American Airlines, according to CNN.

AMR, which has been in bankruptcy since November 2011, must still construct a formal restructuring plan incorporating the merger that meets court and creditor approval before the airline can emerge from bankruptcy.

Meanwhile, the merger deal, announced last month, still needs approval from antitrust regulators and U.S. Airways shareholders.

Under the merger plan, the combined carrier will be called American Airlines and based at American’s headquarters in Dallas, Texas, with a major presence at U.S. Airways headquarters in Arizona.

The combined American Airlines will join United Continental, Delta Air Lines and Southwest Airlines as the industry’s dominant players in the country.

After the merger, about 86 percent of the U.S. domestic air travel will be in the hands of four big airlines.