DoJ tells USAir, AMR to divest from 7 airports

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.

Via: CNBC

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To save merger, US Air, American may seek changes at D.C.'s Reagan National

WASHINGTON — The fate of an $11 billion deal to create the world’s largest airline might hinge in large part on one airport, but not just any airport: It’s the one right across the Potomac River from the nation’s capital.

When the Justice Department sued in August to block the merger of American Airlines and US Airways, it cited the deal’s potential impact on Ronald Reagan Washington National Airport. The combined airline would control 69 percent of the takeoff and landing slots at the terminal, a deal-breaker for the department’s antitrust division.

“Blocking the merger will preserve current competition and service at Reagan National Airport, including flights that US Airways currently offers to large and small communities around the country,” Assistant Attorney General Bill Baer said when he announced the lawsuit in August.

While the two sides are preparing to go to trial late this month, they brought in a mediator last week to work out possible solutions. If the airlines and the government settle the case before going to court, aviation observers think that any deal would involve the merged airline giving up some of its dominance in Washington.

Via: McClatchy

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Read more here: http://www.mcclatchydc.com/2013/11/05/207435/to-save-merger-us-air-american.html#storylink=cpy

Nov. 25 date set for trial of American and US Airways merger

A U.S. District Court judge set a Nov. 25 date for the start of a trial over the proposed merger that would create the largest airline in the world.

AMR Corp., the parent company of American Airlines, was set to merge with US Airways earlier this month when theU.S. Department of Justice filed a lawsuit, saying a merger would hurt competition and lead to higher fares.

The Justice Department had requested that a trial for the lawsuit begin March 3, 2014, while lawyers for the airlines requested that the trial begin sooner, on Nov. 12.

The decision by District Judge Colleen Kollar-Kotelly is a victory for the airlines, whose lawyers argued that a prolonged delay to the merger could hurt the financial future of the carriers.

Despite the objections of the Justice Department, several analysts predict that the merger will take place, either after a short trial or following a settlement to the lawsuit.

"We think there is still an excellent chance this case never goes to trial since it can and should be resolved with a negotiated settlement, but if it does, we expect the airlines to prevail," according to an analysis by the independent research firm Gimme Credit.

New York-based Wolfe Research agreed.

"We still ascribe at 75% likelihood of this deal happening."

Via: LA Times

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DOJ suit against airline merger further alienates unions

The Obama administration is again facing criticism from Big Labor, one of the president's top political supporters, this time for trying to block the American Airlines-US Airways merger.

At least four labor unions have joined in opposition to the Justice Department's Aug. 13  anti-trust suit that essentially argues the proposed, $11 billion merger could reduce the number of flight choices for customers, allow the two airlines to control pricing, and increase fares and fees.

Unions representing American pilots and flight attendants from both airlines were, as expected, the first to criticize the administration and the suit.

But the AFL-CIO’s Transportation Trade Department recently joined the fight, putting some added muscle behind opposition to the administration's case.

“It’s going further than just a few unions that really don’t represent a lot of people,” Marc Scribner, a transportation policy expert with Washington-based Competitive Enterprise Institute, told FoxNews.com on Monday. 

In just the past several months, unions have criticized the president’s signature health care law as a jobs killer, claiming the law's mandate on employers to provide insurance to full-time workers is forcing them to cut jobs or send people into part-time status. They've also ripped the administration for not approving the Keystone XL pipeline and for a proposal to allow small knives in plane cabins, which representatives for pilots and flight attendants helped defeat.

Via: Fox News Politics

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