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

August 30, 2013|By Hugo Martin
  • The U.S. lawsuit clouds the future of American Airlines, which had planned to emerge from bankruptcy soon.
The U.S. lawsuit clouds the future of American Airlines, which had planned… (Jim Watson / AFP/Getty Images )

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 the U.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."

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