Hopes rise for American Airlines-US Airways merger

Hopes rise for American Airlines-US Airways merger

Hopes have risen for the planned $11 billion merger between American Airlines and US Airways after the US attorney-general said his department hoped to resolve its objections to the deal without a trial.

Talks between the Department of Justice and the airlines come ahead of the scheduled November 25 start of hearings in a federal court in Washington on the DoJ’s suit to block the deal.

Attorney-general Eric Holder said his department hoped to resolve the issues surrounding the proposed merger “short of trial” but that, if the department’s demands were not met, it was fully prepared to go ahead with court action, the Financial Times reports.

His comments mark a sharp change of tone from that of Bill Baer, head of the DoJ’s antitrust division, when the department sued to block the deal in August.

Baer said then that the department remained open to talks on a potential deal to clear the transaction, but the “best idea at the moment” remained a complete block.

The impact on competition at airports such as Reagan National in Washington, where the combined company would control 69% of take-off and landing slots, was seen as a major concern. There are also implications for other airports including New York’s LaGuardia and JFK.

However, Holder said: “What we have tried to focus on is to make sure that any resolution in this case necessarily includes divestitures of facilities at key constrained airports throughout the United States.”

He stressed that there would need to be significant concessions before the DoJ agreed to a deal.

The department identified more than 1,000 routes where it said the planned merger would significantly harm competition.

“We will not agree to something that does not fundamentally resolve the concerns that were expressed in the complaint,” Holder said.


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