Maryland has not joined the U.S. Department of Justice in the lawsuit to block the American Airlines and US Airways Group Inc. merger, but the District of Columbia and the state of Virginia have. Each has been negotiating separately with American’s parent company, AMR Corp., over the details of the new American Airlines’ hold on local airport slots.
The main concern is that the combination of the airlines will reduce competition and raise airfares. AMR and US Airways have argued from the beginning that the new airline will improve service for consumers and will level the playing field with the two largest carriers, Delta Air Lines and United Continental.
As we discussed in our Aug. 24 post, the DOJ was particularly concerned that the new airline would have a disproportionate share of gates at Reagan National Airport in Washington — one of the reasons that Virginia and the District of Columbia joined the lawsuit. The airlines countered that the Washington metroplex is served by other airports as well, notably Baltimore’s international airport, where the new airline would not dominate.
Holder told the press recently that the DOJ will continue to press for a resolution that requires American to shed facilities at airports that the department feels would be constrained by the merger. He said, too, that he still plans to block the merger if negotiations with the airline fail.
AMR is anxious to settle the matter so it can move forward with its planned exit from Chapter 11 bankruptcy. The court approved the merger as presented in the plan, but if AMR agrees to reduce its presence in any airports, the new plan will need the court’s approval.
The court set Nov. 25 as the first day of trial, if it comes to that.
Sources:
Crain’s New York, “AMR, US Airways must shed some assets,” Bloomberg, Nov. 4, 2013
Star-Telegram, “Other states not dropping legal challenge to AMR-US Airways merger,” David McLaughlin and Sara Forden, Oct. 04, 2013