American Airlines, US Airways settle merger lawsuit

Summary:A lawsuit that threatened the firms' potential merger has been settled.

American Airlines and US Airways have settled a lawsuit brought forward by the U.S. Justice Department, removing another obstacle to the controversial merger.

U.S regulators sued the airlines to try and stop the $11 billion merger in August, after its announcement in February this year. Both airlines say that the deal is necessary for their survival in the face of increased competition.

If the merger goes ahead, it would create the world's largest airline, which critics say would have a negative impact on flight and route competition across the United States. In a statement, Attorney General Eric Holder said:

"This agreement has the potential to shift the landscape of the airline industry, and ensures airline passengers will see more competition on nonstop and connecting routes throughout the country."

As part of the settlement agreement, slots will be opened by the airlines for use by rivals at several U.S. airports. Both airlines will give up 57 slots to low-cost carrier airlines at Ronald Reagan International Airport, and 34 slots at LaGuardia Airport in New York City. An additional two slots each will be released at Boston Logan International, Chicago O'Hare International, Dallas Love Field, Los Angeles International and Miami International.

The settlement paves the way for the merger to go ahead, pending a judge's approval.

Via: BBC

Image credit: American Airlines

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This post was originally published on Smartplanet.com

Topics: Innovation

About

Charlie Osborne, a medical anthropologist who studied at the University of Kent, UK, is a journalist, freelance photographer and former teacher. She has spent years travelling and working across Europe and the Middle East as a teacher, and has been involved in the running of businesses ranging from media and events to B2B sales. Charli... Full Bio

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