Coverage of the merger between American Airlines and US Airways

Two Key Hearings in Two Days for American Airlines

American faces hurdles in merging with US Airways

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    NEWSLETTERS

    American Airlines takes its fight to exit bankruptcy and merge with US Airways into separate courtrooms in New York and Washington, D.C., this week. (Published Thursday, Aug 29, 2013)

    American Airlines takes its fight to exit bankruptcy and merge with US Airways into separate courtrooms in New York and Washington, D.C., this week.

    On Thursday, U.S. Bankruptcy Judge Sean Lane in New York will hear arguments from American's attorneys about why he should approve the carrier's restructuring plan now. Combining with US Airways to become the world's largest airline is a key part of the plan.

    The judge had appeared on the verge of accepting the proposal two weeks ago and allowing American to exit bankruptcy. But in a surprise move, the U.S. Justice Department filed a lawsuit to stop the merger, arguing it would be anti-competitive and cause higher fares.

    Lane has hinted he has problems with approving the proposed restructuring while the government's lawsuit remains unresolved and threatens to unravel American's entire exit strategy from bankruptcy. But airline attorneys are pushing him to make a decision, contingent on the government complaint being resolved later.

    On Friday, meanwhile, airline lawyers are set to come face-to-face with government attorneys who are challenging the merger when U.S. District Judge Colleen Kollar-Kotelly in Washington, D.C., holds a hearing into the Justice Department's anti-trust complaint.

    Both sides are bickering over when the trial should be held. The Justice Department said it needs more time to prepare its case and wants the trial in March.

    American Airlines said the delay is "entirely unreasonable." The Fort Worth-based company has suggested a trial date in November.

    Many analysts predict the merger will still take place without a trial. They say the airlines will likely compromise and give up some key routes to ease anti-competition concerns.

    For now, however, both sides are posturing for a full-blown trial. No matter what happens, the legal wrangling will almost certainly delay American's exit from bankruptcy for several months.

    NBC 5's Scott Gordon has covered American's bankruptcy from the beginning and will be in New York and Washington for this week's court action.


    American Airlines Merger:
    Complete coverage of the merger between American Airlines and US Airways into the newly-formed Fort Worth-based company, American Airlines Group (AAL). Click here for more.