American, US Airways, DOJ reach merger suit settlement

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Mike Fuentes

A settlement has reportedly been reached in the DOJ lawsuit against the merger of American Airlines and US Airways. Photographer: Mike Fuentes/Bloomberg

Nicholas Sakelaris

Staff Writer- Dallas Business Journal

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Fort Worth-based American Airlines and US Airways Group have reached a settlement with the U.S. Justice Department in the DOJ antitrust lawsuit seeking to block their proposed $17 billion merger.

A settlement in the lawsuit would allow for AMR Corp. (OTC: AAMRQ) to complete its Chapter 11 bankruptcy plan by merging with US Airways Group (NYSE: LCC), which is based in Tempe, Ariz.

A settlement would require a judge's approval.

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The merged airline will be the largest in the world and will be headquartered in Fort Worth.

The airlines will sell 104 takeoff and landing slots at Reagan National Airport near Washington D.C., 34 slots at LaGuardia Airport in New York and other assets at five other airports, including O'Hare Airport in Chicago, Los Angeles International Airport and Boston Logan Airport.

Key slots will be given to low-cost carriers, the DOJ reported.

DOJ officials call the settlement “groundbreaking” because it puts low-cost carriers in a better position to compete. That includes Dallas-based Southwest Airlines (NYSE: LUV) which gets an opportunity to purchase slots that they currently lease from American at LaGuardia. JetBlue will have the chance to do the same at Reagan National.

“This settlement will disrupt the cozy relationships among the incumbent legacy carriers, increase access to key congested airports and provide consumers with more choices and more competitive airfares on flights across the country,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division. “This agreement has the potential to shift the landscape of the airline industry. By guaranteeing a bigger foothold for low-cost carriers at key U.S. airports, this settlement ensures airline passengers will see more competition on nonstop and connecting routes throughout the country. The department’s ultimate goal has remained steadfast throughout this process—to ensure vigorous competition in airline travel.”

Nicholas covers the energy, manufacturing, aviation and transportation beats for the Dallas Business Journal. Subscribe the Energy Inc. newsletter