The Department of Justice said Tuesday that it will require US Airways and AMR to divest facilities at seven airports in order to for their proposed merger to proceed.
Shares in US Airways were halted earlier Tuesday morning, after early reports saying that the two airlines were close to settling a state and federal antitrust suit.
The settlement with the Department of Justice will allow the deal to proceed.
USAir shares were up 3.4 percent before the halt. Shares in AMR, which has continued to trade despite its bankruptcy, rose 33 percent.
Other airline shares rose sharply as well on the news.
The government filed a lawsuit in August arguing that US Airways and AMR Corp, parent of bankrupt American Airlines, should be forced to scrap their proposed merger, which would create the world's largest airline.
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