American and US Airways Preparing Settlement Offer

A US Airways aircraft at LaGuardia

American Airline’s parent AMR and US Airways would offer to give up some takeoff and landing slots at Ronald Reagan National Airport in Washington, D.C. in exchange for getting the Department of Justice to drop its suit that seeks to block the merger, which would create the world’s largest airline by passenger traffic, a Wall Street Journal report said on Wednesday.

The report, which cited two people familiar with the process, said that a major AMR bondholder had been pushing the two airlines to make such an offer, but that the airlines had been reluctant to do so.

AMR CEO Tom Horton, speaking at a conference in New York, said that the airline believes that a settlement is better for both sides, adding that it’s the airlines’ responsibility to make a strong settlement proposal.

The head of the DOJ’s antitrust unit, Bill Baer, has previously indicated that the government would listen to settlement proposals but remains convinced that the “right solution” was to prevent the merger from taking place.

The Department of Justice filed to block the combination in August.  The case is set to go to trial on November 25, and U.S. District Judge Colleen Kollar-Kotelly, the trial judge, has said she intends to issue a ruling by January 10.

On Monday, the two airlines and the Department of Justice said that they intended to meet with a mediator to attempt to resolve issues stemming from the DOJ lawsuit filed in August that seeks to block the merger of the two carriers.

(Photo: Accura Media Group)