In a filing which defended their proposed merger against a US antitrust lawsuit, American Airlines and US Airways Group claimed yesterday evening that their partnership would benefit consumers to the tune of $500 million a year. They also announced plans to extend the termination date of the merger if they could not secure regulatory approval by December 17th.
In Feb. 2013, the two groups announced plans to merge, after their research concluded that joining forces could net them over a billion dollars annually in revenue and shared operational costs. The proposed merger would also make them the largest airline in the world, which raised concerns about the monopolization of certain flight routes and a reduction of competition across the industry.
In August, the Department of Justice and a handful of attorneys general filed a lawsuit blocking the $11 billion merger. The case claims, among other things, that “This merger—by creating the world’s largest airline— would, in the words of US Airways’ management, ‘finish industry evolution.’ It would reduce the number of major domestic airlines from five to four, and the number of ‘legacy’ airlines—today, Delta, United, American, and US Airways—from four to three. In so doing, it threatens substantial harm to consumers.”
The DOJ’s primary concern is that a reduction in flights to certain markets and therefore less competition will end up increasing ticket costs for consumers.
American Air and US Airways said in their filing, however, that it’s the regulation seeking to stop the creation and development of newer fight services that really threatens consumer choice. They also claim that legacy carriers are not relevant to the argument because they were frequently the least financially successful amongst major airlines.
The antitrust case will go to court in November, where the future of the merger will be determined based on a judge’s decision and without a jury.