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DOJ clears American Airlines-US Airways merger for takeoff

The new company will be forced to divest facilities at seven key airports to increase competition

The new, merged American Airlines and US Airways: You are all cleared for takeoff.

The Department of Justice (DOJ) came to an agreement with US Airways Group Inc. and AMR Corp., American Airlines’ parent company, on Nov. 12 that would allow the companies to proceed with a merger as planned. The DOJ had previously filed an antitrust suit against the merger, claiming the deal would send airline prices sky high and would create a near-monopoly out of Washington D.C.’s Ronald Reagan National Airport.

Under the agreement, the DOJ says, the merged company will divest facilities at seven key airports across the country in order to keep those airports competitive. That includes Reagan, where the company will divest 104 takeoff and landing slots.

“When we filed this lawsuit, I explained that this merger would eliminate the head-to-head competition between US Airways and American, risked increased coordination between the remaining three legacy carriers – New American, United and Delta – and increased the parties’ dominance at Reagan National,” Assistant Attorney General Bill Baer said. “This settlement addresses each of these concerns.  In important ways this outcome is better than a full stop injunction.”

A trial date had been set for Nov. 25 after the airlines requested an early trial. However, there were indications in recent days that the two sides were working on a deal ahead of the trial date. Now, the settlement only needs to be approved by the Federal District Court in the District of Columbia and by the judge overseeing American’s bankruptcy proceeding.

The merger is an important one for AMR Corp., which had filed for bankruptcy in 2012 and viewed the merger as a vital part of its exit plan. This merger creates the world’s largest airline and will leave three major U.S. airline carriers: the merged American, United and Delta, with the latter two also having completed major mergers recently.

 

InsideCounsel has been on this story from the beginning. For the full timeline, check out these articles:

DOJ, US Airways and AMR Corp. in settlement discussions over airline merger

DOJ asks judges to delay civil cases over budget issues

US Airways defends American Airlines merger

Michigan the latest to join American Airlines-U.S. Airways antitrust suit

American Airlines and US Airways seek early trial in antitrust suit

DOJ files antitrust suit against U.S. Airways-American Airlines merger

Attorneys general join DOJ probe into US Airways-American Airlines merger

American Airlines-US Airways merger approved

Contributing Author

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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