American Airlines, US Airways seek November court date
Aug. 23, 2013, Dallas, Tx. - American Airlines and US Airways want a trial in the government's lawsuit against their proposed merger to start in November, three months sooner than the date picked by federal officials.
August 23, 2013 By Carey Fredericks
The airlines estimated that the trial would last 10 days, meaning that even if they win, the merger won't close until late this year.
American parent AMR Corp. had hoped to complete the merger and come out of bankruptcy protection in September. It said in a court filing Thursday that the delay is costing AMR $500,000 a day in professional fees such as lawyers' bills for its bankruptcy case.
The airlines asked the court for a Nov. 12 trial, while the Justice Department favours a trial starting no sooner than Feb. 10.
Lawyers for the airlines noted that either company can back out of the merger if regulators don't approve it by Dec. 13. They said delaying the trial past that date would cause "even greater uncertainty'' for employees and customers. Morale is already suffering, they said.
The merger was steaming toward final approval this month until the U.S. Justice Department and six states threw up a roadblock. They filed a lawsuit in federal district court in Washington, D.C., to stop the merger, saying it will reduce competition and lead to
higher fares and extra fees for consumers.
The case might never get to trial. The airlines are likely to keep trying to negotiate a settlement that would require concessions – at a minimum, giving up takeoff and landing slots at Reagan National Airport outside Washington – but allow the merger to go ahead. Publicly, however, both sides have sounded as if they're ready to fight, not talk.
US Airways Group Inc. CEO Doug Parker, who would run the combined company, said in a message to employees Thursday, "We are eager to get to court so that we can make our case and explain exactly how this merger enhances competition across the US and the globe.''
Parker and AMR CEO Tom Horton say that the merger would help consumers by creating a third giant airline roughly the size of United and Delta. The Justice Department argues that it will hurt competition by leaving just four airlines – United, Delta, Southwest and the post-merger American – controlling more than 80 per cent of the U.S. air-travel market.