American Airlines appears set to emerge from bankruptcy protection after a federal judge in the United States approved its recovery plan.

However, judge Sean Lane of the United States Bankruptcy Court in Manhattan ruled the decision was contingent on Justice Department approval of the carrier’s merger with US Airways.

The department of justice has said it would attempt to block the merger on competition grounds.
American is seeking to exit restructuring proceedings nearly two years after the carrier filed for bankruptcy.

As part of the plan, American agreed this year to merge with US Airways, a move that received the backing of creditors as well as its three main labor groups.

Both American and US Airways have argued they needed to combine their networks to be able to better compete with Delta Air Lines and United Airlines, both bigger carriers that completed mergers of their own in recent years.