Judge Holds Hearing in American Air Bankruptcy Case

An American Airlines jet at its terminal at JFK

For the latest information on the judge’s ruling, please click here.

 The judge presiding over American Airline’s bankruptcy case held a hearing on Monday to consider the November 12 settlement between the U.S. Department of Justice, American Airlines, and its merger partner, US Airways.  The judge made no ruling during the more than two hour hearing, although he promised to make a decision by Wednesday.

American and US Airways first announced plans to merge in February.  The Justice Department filed suit to block the merger in August, citing antitrust grounds.  In its initial filing, it argued that the merger would harm consumers by reducing competition, increasing airfare costs, and reducing service to more densely populated areas.

The combination of the number three and number five airlines would create the world’s largest airline by passenger traffic.

The settlement calls for the two airlines to divest a total of 52 slot pairs at Washington Reagan National Airport and 17 at LaGuardia Airport in New York as well as an unspecified number of gates and some related facilities.   The airlines would also divest two gates at Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles International, and Miami International airports.

The hearing was to allow U.S. Bankruptcy Judge Sean Lane the opportunity to consider the terms of the settlement and determine if the settlement has changed American’s plan of reorganization, which he provisionally approved on October 22 enough that the airline’s creditors and shareholders should be given another chance to vote on the plan.

Lane said that he plans to issue a ruling before Thanksgiving, and as early as Monday afternoon.

(Photo: Accura Media Group)