American Airlines, US Airways Agree to Antitrust Settlement With Department of Justice

Settlement still requires a judge's approval; merger expected to be completed in December

Fort Worth-based American Airlines and Phoenix-based US Airways have reached an agreement with the U.S. Department of Justice that will allow their merger to continue, creating the world's largest airline.

As part of the settlement, the airlines will give up 104 slots at Reagan and 34 at New York's LaGuardia including ground facilities at both. The airlines will also give up rights and interests to two gates and ground facilities at the following airports: Chicago O'Hare, Los Angeles International, Boston Logan, Miami International and Dallas Love Field. Take a closer look at the concessions here.

Despite the divestitures, the merged airline said Tuesday they still expect to be able to generate more than $1 billion, beginning in 2015.

The final judgment settling the lawsuit was filed Tuesday in United States District Court, though the settlement does still require the approval of a federal judge in Washington. The documents filed Tuesday included an asset preservation order and stipulation that had been agreed upon by both the airlines and DOJ as well as the competitive impact statement that outlined the conditions for the settlement.

Read the filings here: Document 147 and Document 148 (Competitive Impact Statement).

The airlines expect the merger to be completed in December.

"This is an important day for our customers, our people and our financial stakeholders. This agreement allows us to take the final steps in creating the new American Airlines. With a renewed spirit, we are about to create the world's leading airline that will offer, along with our OneWorld partners, a comprehensive global network and service by the best people in the business. There is much more work ahead of us but we're energized by the challenge and look forward to competing vigorously in the ever-changing global marketplace," said Tom Horton, president and CEO of AMR.

In August, the government sued on behalf of the states of Arizona, Florida, Michigan, Tennessee, Pennsylvania, Virginia, Texas and Washington, D.C., to block the merger, saying it would restrict competition and drive up prices for consumers on hundreds of routes around the country. Throughout, the airlines said the merger would increase competition by creating another big competitor to United Airlines and Delta Air Lines, both of which grew through recent mergers.

Texas Attorney General Greg Abbott, who initially opposed the merger and was a part of the DOJ lawsuit, changed his opinion and offered his support for the merger after a meeting with AMR executive leadership. Around that time, Abbott, a Republican, also announced his candidacy for governor of Texas.

Abbott's support of the merger was followed a few weeks later by a campaign that included the mayors of several large U.S. cities who called on the DOJ and U.S. Attorney General Eric Holder to settle the lawsuit and to allow the merger. The attorney general of Florida also met with Horton and expressed hope for a settlement, adding to the sense of crumbling opposition to the merger. Meanwhile, dozens of Democratic members of Congress implored the Obama administration to drop the lawsuit -- including current gubernatorial candidate Texas Sen. Wendy Davis, who wrote the president in August asking him to intervene.

After the announcement Tuesday, Abbott said it was a great day for American Airlines and for jobs in Texas. 

"We didn't think we should have to give up anything," said Doug Parker, the US Airways CEO who will lead the new Fort Worth-based company. "The lawsuit should not have been filed, but once it was, there is some risk in going all the way to trial. This settlement was worth doing rather than taking on that risk."

Earlier in the day, while thanking politicians and business officials who lobbied in support of the merger, Parker said "This is very good news and we are grateful to all who have made it happen."

Meanwhile, Holder said Tuesday the new agreement would ensure more competition on nonstop and connecting routes throughout the country. The department called the slot and gate divestitures at key airports "groundbreaking," the Associated Press reported.

CNBC reported ahead of the announcement that shares in US Airways were halted Tuesday morning. Prior to that, USAir shares were up 3.4 percent. Shares in AMR, which has continued to trade despite its bankruptcy, rose 33 percent. CNBC also reported that other airline shares rose sharply on the news.

NBC 5's Ray Villeda and Associated Press writers David Koenig and Pete Yost contributed to this report.

Copyright AP - Associated Press
Contact Us