Coverage of the merger between American Airlines and US Airways

Texas Attorney General Announces Settlement in Challenge to AA-US Airways Merger

View Comments ()



    Attorney General Greg Abbott said in a news conference on Tuesday that there was no politics involved in the settlement reached with American Airlines. (Published Tuesday, Oct. 1, 2013)

    Texas Attorney General Greg Abbott and American Airlines CEO Tom Horton held a joint news conference Tuesday to announce that Texas has reached a settlement agreement with American Airlines and US Airways to supports the proposed merger between the airlines.

    Abbott Announces Settlement in Texas Challenge of Airline Merger

    [DFW] Abbott Announces Settlement in Texas Challenge of Airline Merger
    Texas Attorney General Greg Abbott and American Airlines CEO Tom Horton held a joint news conference Tuesday to announce that Texas is dropping its challenge to the proposed American Airlines-US Airways merger. (Published Tuesday, Oct. 1, 2013)

    "The settlement we arrived at, represented by this document, ensures that the new merged American Airlines will maintain daily service to rural airports across the state of Texas, that thousands of jobs in Texas will be preserved and that the headquarters for the merged company will remain in the Dallas Fort Worth area," Abbot said. "The result is a settlement agreement that serves the best interest of the people of Texas and ensures that daily service will continue to 22 airports across the state."

    American Airlines and US Airways announced in February that they planned to merge in a deal that would create the biggest airline in the world. But that plan has been slowed, in part, by a U.S. Department of Justice suit to block the merger backed by Texas and 18 other states.  The Department of Justice asked for a stay in the anti-trust case on Tuesday, saying the government shutdown will prevent its attorneys from working.

    Texas is now planning to file a motion to pull out of that suit in light of the agreement outlined Tuesday. Abbott said the settlement resolves one of Texas' top concerns about the proposed merger, which was the potential for cutbacks to service in rural areas. Such cuts, he said, would have had a major impact on Texans traveling to and from military bases.

    "This is particularly helpful to members of our military and those who work with them," Abbott said of the settlement language.

    He also praised the settlement for ensuring that the company will "continue to be a source of economic development" for Texas.

    "This is good for American Airline customers, the communities it serves and for jobs in the state of Texas," Abbott said.

    Horton addressed how Tuesday's settlement in Texas could impact DOJ lawsuits with other states.

    "This is an example of what happens when we sit down and talk to the people on the other side of the table and find a way to address concerns. I think this is very forward thinking of the attorney general and the state of Texas and I'd like to think that creates a template for moving forward,"  said Horton.

    When Abbott was asked about the timing of the settlement, he said it had nothing to do with politics or his run for governor.

    "Our goal is to enforce what we consider the law, as you know there are many people who think all my lawsuits against the Obama administration are unpopular, but thats just the way it goes," he said.

    Abbott was asked about the timeline, when his office was able to get firm details of the settlement, but didn't give any.

    Tom Horton did say discussions were ongoing with the Department of Justice but did not elaborate.

    Tuesday's announcement comes after record-setting revenue results for American Airlines and the Fort Worth-based carrier's announcement that it would hire 1,500 additional pilots.

    Though American Airlines' plan to emerge from bankruptcy protection and the proposed merger with US Airways was approved by a federal judge last month, the airlines are still trying to resolve a lawsuit from the federal government. The airlines extended the merger deadline to Jan. 18 to give themselves time to deal with the DOJ review.

    Abbott did not rule out rejoining the litigation on the company's side, though he added that he could not commit to what he would do in a hypothetical situation.

    "Anything that we can do to protect the headquarters, protect the jobs, protect the future of (American Airlines) will be part of our interest that we'll be happy to take a look at," he said.

    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.