US Airways, American Airlines Parent Settle Antitrust Suit

Tuesday, November 12th 2013, 11:50 am
By: News On 6

US Airways and AMR, the parent company of American Airlines, have settled a state and federal antitrust lawsuit.

The U.S. Justice Department sued in August to block the merger, saying the deal would limit competition and drive up prices.

A settlement allows the merger of US Airways and American Airlines to proceed.

The Department of Justice says it's requiring US Airways and AMR to sell slots and gates at key airports across the country to low-cost carrier airlines. The DOJ says that will "enhance system-wide competition in the airline industry resulting in more choices and more competitive airfares for consumers."

See Chart Of Past Fare Impact

DOJ says the proposed settlement will increase the presence of the low-cost carriers at the following airports:

Boston Logan International
Chicago O'Hare International
Dallas Love Field
Los Angeles International
Miami International
New York LaGuardia International
Ronald Reagan Washington National

Read Competitive Impact Statement issued Tuesday, November 12, 2013.

DOJ says providing the low-cost carriers with the incentive and ability to invest in new capacity and permitting them to compete more extensively nationwide will enhance meaningful competition in the industry and benefit airline travelers.

9/23/2013: Related Story: American Airlines, US Airways Extend Merger Agreement

American Airlines: Turbulent Times

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.

In a statement, Transport Workers Union of America Air Transport Director Garry Drummond praised the settlement.

"Today's announcement will allow TWU members at American Airlines to gain long-delayed raises. Negotiations for our members at US Airways have been in limbo as a result of the DoJ's actions, those talks can now move forward," Drummond said.

"We also can begin to move forward on working out final details related to combining the two airlines' work groups."

CEOs of both airlines - Tom Horton and Doug Parker - sent a letter to employees saying the divestitures required by the settlement are not expected to impact total employment at the "new American."

"Certain airports may be affected as a result of the divestitures, but we will offer those employees opportunities elsewhere in the system," the memo states.

Nothing was mentioned Tuesday about the future of the maintenence facility American operates in Tulsa.

Representatives for the 4,700 mechanics employed there are waiting to hear from the airlines that they're committed to keeping planes coming in for service.

"We know we're going to have space available and people available, and as the older fleets retire and the newer fleets come on, they need less and less maintenence, and we know US Airways brings a lot of opportunity for more aircraft...We'd love to get some commitment, though, to jobs in Tulsa," said Jay Potter, with the TWU Local 514.

The merger will have to be approved by the U.S. Bankruptcy Court, and the companies expect to complete the merger in December, 2013.