U.S. Reaches Preliminary Deal in American-US Airways Merger Lawsuit

[alp227]

Source: NYT

The Justice Department has reached a preliminary agreement to settle its fight with American Airlines and US Airways over their proposed merger, according to a court document filed on Tuesday.

Under the proposal, American and US Airways would sell 104 takeoff and landing slots at Ronald Reagan National Airport in Washington, 34 slots at La Guardia Airport in New York, and various assets at five other airports, including O’Hare Airport in Chicago, Los Angeles International Airport and Boston Logan International Airport.

The settlement still needs to be approved by the Federal District Court in the District of Columbia as well as a judge overseeing American Airlines’ bankruptcy proceeding. The airlines are confident they can now close their merger deal by mid-December.

Shares in US Airways were halted for pending news on Tuesday morning. They had risen 3.5 percent after Bloomberg News reported that a settlement had been reached. They resumed trading at 11:51, and shares were down more than 1 percent at midday, to $22.88.

Read more: http://dealbook.nytimes.com/2013/11/12/u-s-said-to-be-near-settling-american-us-airways-merger-lawsuit/

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Bloomberg: AMR, US Airways Must Divest Slots in U.S. Settlement

Dallas Morning News: Confirmed: Settlement reached in the American Airlines-US Airways case

Fort Worth Star-Telegram: Settlement reached in American-US Airways antitrust case

Arizona Republic: US Airways, American reach settlement with feds

(AMR is based in Fort Worth, TX; US Airways in Tempe, AZ)

NPR: Airline Antitrust Deal Seen Boosting Competition At Airports

[PSPS]

1. In other words, the approval was delayed to allow the insiders to acquire a more profitable position

[Kennah]

2. And fuck over the workers. It's a two fer.

I think the big airlines are in a death spiral. High speed rail is our future. Too bad we as a nation didn't embrace it sooner.

[BlueEye]

3. To be fair, the Unions all wanted this

Labor weighed their options and came out strongly in support of the merger:

http://aviationblog.dallasnews.com/2013/11/what-do-american-airlines-and-us-airways-unions-say-about-the-doj-settlement.html/

I agree they still are getting screwed by management, but the new American will bring stability and *some* beneficial changes to their pay scale in the long-run.

Lastly, I agree that high speed rail will take over on routes 500 miles and below, but transcontinental and obviously transoceanic flights will always leave room for a well developed airline industry.

[Blue_Tires]

4. I don't know how less competition is going to help the industry

but then again the big-time CEOs and boards of directors have *never* really cared about true competition...They're all pure socialists at heart -- Everybody gets a piece of the pizza, and no one goes hungry...

[geek tragedy]

6. Problem was that neither US Air or American were going to be able to compete

with United and Delta. So, instead of 3 you'd wind up with 2 after both US Air and American got trampled.

[geek tragedy]

5. Once they allowed United-Continental and Delta-Northwest they pretty much

had to let this one go through.

This kind of consolidation can benefit consumers if there's actual competition in all/most markets between the big 3 and from the smaller airlines. More efficient travel routes without the zany codesharing stuff.

Big question is how intense the competition actually is.