AA-US merger to go ahead after settlement

AA-US merger to go ahead after settlement

Airline agrees to divest slots and gates, paving way for December merger

Airline agrees to divest slots and gates, paving way for December merger

The merger will create a new American Airlines-branded carrier
The merger will create a new American Airlines-branded carrier

The merger between American Airlines and US Airways will go ahead, after the companies settled an anti-trust lawsuit brought by the US Department of Justice (DOJ).

The DOJ, backed by seven US states and districts, had moved to block the merger, arguing that the combined airline be anti-competitive, leading to higher fares and reduced competition. But the airlines have now settled the case, agreeing to divest two gates each at Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles and Miami airports.

It will also be forced to sell 69 slot pairs at Washington Reagan and New York LaGuardia airports, meaning the new American Airlines will operate approximately 56 fewer daily departures at the two airports than the two airlines operate today. Delta Air Lines has already expressed an interest in acquiring the slots, particularly at Washington Reagan airport.

The new American has also agreed to maintain its operations in Charlotte, New York JFK, Los Angeles, Miami, Chicago O’Hare, Philadelphia and Phoenix airports on a par with their existing levels for a period of three years.

Tom Horton, chairman, president & CEO of American Airlines’ parent company, AMR Corp, and incoming chairman of the merged company, said the settlement marked “an important day” for the airline.

“This agreement allows us to take the final steps in creating the new American Airlines,” Horton said. “There is much more work ahead of us but we’re energised by the challenge and look forward to competing vigorously in the ever-changing global marketplace.”

The merger of American and US Airways, to create a new American Airlines-branded carrier, is now expected to be completed in December 2013. The new entity will offer approximately 6,700 daily flights to 336 destinations in 56 countries with a combined fleet of 950 aircraft.

Mark Elliott
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Mark Elliott
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