Federal Judge Rejects Last Ditch Bid to Block American-US Air Merger

By Paul Riegler on 6 December 2013
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American's old and new liveries in Chicago

American’s old and new liveries in Chicago

A federal judge in New York refused to block the merger of American Airlines and US Airways in a hearing on Friday.  The merger is slated to close on Monday and the combination will result in the world’s largest airline.

The two airlines settled their antitrust suit with the Department of Justice last month.  The settlement requires them to give up takeoff and landing slots at several airports including New York’s LaGuardia and Washington Reagan.  U.S. Bankruptcy Judge Sean Lane approved the settlement and American’s reorganization plan, which allows it to emerge from bankruptcy, on November 27.

U.S. District Judge Loretta Preska rejected the argument by Joseph Alioto, a lawyer representing travel agents and airline passengers, who said that the merger would raise prices, reduce service, and make planes more crowded.

The judge said that the plaintiffs had failed to show irreparable harm.

“I adopt Judge Lane’s rendition of the law in all respects,” she said, repeatedly noting that Alioto’s arguments relied on outdated facts, had no supporting evidence, and sometimes made no sense.

“There is nothing in the record from which I can make a finding that your clients are likely to be irreparably injured personally,” the judge said.

Preska refused to stay the effect of her ruling while Alioto files an appeal to the 2nd U.S. Circuit Court of Appeals.

At the hearing, Alioto complained that he’d gotten “the bum’s rush, with all due respect, by the bankruptcy court.”  A lawyer for US Airways said that Alioto’s case lacked proof.

(Photo: Accura Media Group)

Accura News

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