Federal Judge Clears American-US Air Merger

Justice Department’s Settlement with Airlines Gets Green Light

By Paul Riegler on 25 April 2014
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American Airlines' new and old livery

American Airlines’ new and old livery

A federal judge gave final approval Friday to the Department of Justice’s settlement that allows the merger of American Airlines’ parent AMR Corp. and US Airways Group.

U.S. District Judge Colleen Kollar-Kotelly, who had given preliminary approval last year, approved the November 12 settlement that effectively ended the Department of Justice antitrust lawsuit and allowed American and US Airways to merge.

The two airlines consummated their merger in December of last year and have divesting landing slots at certain congested airports, as required by the settlement with the government.

“The Court concludes that the proposed final judgment is in the public interest,” Kollar-Kotelly wrote in a 26-page opinion, adding that the United States “has provided a reasonable basis for concluding that the settlement will mitigate the anticompetitive effects of combining two of the remaining legacy airlines.”

American Airlines and the Department of Justice both said they were pleased with the court’s ruling.

“Together, American Airlines and US Airways have created a strong global competitor that provides better access to more destinations than we could ever provide independently,” the company said in a statement.

“By increasing the presence of low-cost carriers at key constrained airports across the country, … consumers will have more choices to fly at more competitive airfares,” Assistant Attorney General Bill Baer said in a written statement.  “With the settlement, the department is requiring an unprecedented number of divestitures in this industry that will provide enhanced competition across the nation.”

The settlement agreement called for the combine airline to give up 102 slots at Reagan National in Washington, D.C. 34 at New York’s LaGuardia Airport, and two slots each at Boston Logan, Chicago O’Hare, Los Angeles International, Miami Intercontinental, and Dallas Love Field.   The divestiture process is still in process, but three airlines, JetBlue Airways, Southwest Airlines, and Virgin America have managed to acquire most of the slots that have been sold.

(Photo: Accura Media Group)

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