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Attorney general lays groundwork for airline merger settlement

November 05, 2013|By Hugo Martin
  • Atty. Gen. Eric H. Holder Jr. said the Justice Department was negotiating a possible settlement to a lawsuit over the merger of American Airlines and US Airways.
Atty. Gen. Eric H. Holder Jr. said the Justice Department was negotiating… (Associated Press )

If American Airlines and US Airways divest themselves from "key" airports, the U.S. Department of Justice may be willing to drop its challenge to a merger plan for the airlines.

That is the word from U.S. Atty. Gen. Eric H. Holder Jr., who said the Justice Department was discussing a potential settlement of a suit the agency filed in August to halt the merger that would create the nation's largest airline.

"What we have tried to focus on is to make sure that any resolution in this case necessarily includes divestitures of facilities at key constrained airports throughout the United States," Holder said during a press conference on an unrelated matter.

News of a potential settlement may have been what sparked a 20% jump in shares Monday of AMR Corp., the parent company of American Airlines.

Holder did not disclose from which airports the Justice Department wanted the airlines to divest themselves of landing and takeoff slots, but the lawsuit noted, for example, that the two airlines combined would control 70% of the passenger gates at Ronald Reagan Washington National Airport.

The Justice Department lawsuit charges that the merger would lead to higher fares, less competition and a reduction in services to smaller airports.

A lawsuit is scheduled to go to trail Nov. 25 in Washington. Holder said the Justice Department was ready to pursue the suit if the airlines were not willing to meet the agency's demands.

"We hope that we will be able to resolve this short of trial, but if we do not meet those demands that we have, we are fully prepared to take this case to trial, he said.

American Airlines declined to discuss a settlement, saying in a statement: "Any discussions about a settlement to resolve this litigation, whether internal, with DOJ directly or through the mediator would be private and we are not going to comment on them in any way."


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