AMR Corporation and US Airways reach settlement with DoJ, merger to close by Dec-2013
AMR Corporation, US Airways, US Department of Justice (DoJ), six US states and the District of Columbia announced (12-Nov-2013) a settlement in the lawsuit brought by the DoJ and the attorneys general of Arizona, Florida, Michigan, Pennsylvania, Tennessee, Virginia and the District of Columbia, challenging the carriers' proposed merger. The merger's completion remains subject to approval by the US Bankruptcy Court for the Southern District of New York, as well as "certain other conditions." The merger is now expected to close in Dec-2013. Under the terms of the settlement, the carriers agreed to make the following divestitures which will be managed via a DoJ approved process:
- 52 slot pairs at Washington Ronald Reagan National Airport as well as "certain gates" and support facilities. The combined company expects to operate 44 fewer daily frequencies from Washington National after divesting the slots;
- 17 slot pairs at New York LaGuardia Airport as well as "certain gates" and support facilities. The combined carrier expects to operate 12 fewer daily frequencies from LaGuardia after divesting the slots;
- Two gates and related support facilities at Boston, Chicago O'Hare, Dallas Love Field, Los Angeles and Miami.
AMR and US Airways still expect USD1 billion in net synergies by 2015, despite the divestitures. The new carrier will also be required to maintain its hubs at Charlotte, Chicago O'Hare, Los Angeles, Miami, New York JFK, Philadelphia, and Phoenix "consistent with historical operations for a period of three years." In addition, the new carrier will be required to operate daily service to each plaintiff state from one or more of its hubs to each plaintiff state which currently has daily service from either American Airlines or US Airways. The companies' previous settlement with Texas will be amended to make it consistent with this agreement. The carriers also announced an agreement with the US Department of Transportation regarding service to small communities from Washington Ronald Reagan National Airport, with the combined company to use all of its Washington National 'commuter' slot pairs for service to small and medium sized markets. AMR Corporation chairman, president and CEO Tom Horton said: "This is an important day for our customers, our people and our financial stakeholders. This agreement allows us to take the final steps in creating the new American Airlines. With a renewed spirit, we are about to create the world’s leading airline that will offer, along with our oneworld partners, a comprehensive global network and service by the best people in the business. There is much more work ahead of us but we’re energized by the challenge and look forward to competing vigorously in the ever-changing global marketplace." US Airways chairman and CEO Doug Parker added: "We are pleased to have this lawsuit behind us and look forward to building the new American Airlines together." Attorney General Eric Holder stated: "This agreement has the potential to shift the landscape of the airline industry. By guaranteeing a bigger foothold for low-cost carriers at key US airports, this settlement ensures airline passengers will see more competition on nonstop and connecting routes throughout the country." Assistant Attorney General Bill Baer added: "The extensive slot and gate divestitures at these key airports are groundbreaking and they will dramatically enhance the ability of LCCs to compete system-wide. This settlement will disrupt the cozy relationships among the incumbent legacy carriers, increase access to key congested airports and provide consumers with more choices and more competitive airfares on flights all across the country." [more - original PR] [more - original PR - II] [more - original PR - III] [more - original PR - 8K - I] [more - original PR - 8K - II] [more - original PR - DoJ - I] [more - original PR - DoJ - II] [more - original PR - AZ] [more - original PR - DC] [more - original PR - FL] [more - original PR - MI] [more - original PR - PA] [more - original PR - TN] [more - original PR - VA]