Judge Colleen Kollar-Kotelly of the U.S. District Court for the District of Columbia.
Judge Colleen Kollar-Kotelly of the U.S. District Court for the District of Columbia. (Photo: Diego M. Radzinschi/THE NATIONAL LAW JOURNAL)

A federal judge in Washington on Friday approved a settlement between the U.S. Department of Justice and American Airlines and US Airways that will allow the airlines to proceed with their $11 billion merger.

The agreement will require the companies to give up takeoff and landing slots and gates at several major airports. The slots would be sold to low-cost carriers approved by the government.

“The United States has provided a reasonable basis for concluding that the settlement will mitigate the anticompetitive effects of combining two of the remaining legacy airlines,” U.S. District Judge Colleen Kollar-Kotelly wrote.

The judge noted that the settlement involved more divestitures than a previous merger between United Airlines Inc. and Continental Airlines.

“The United States expects that these substantial divestitures will significantly strengthen the purchasing carriers, providing the incentive and ability for these [low-cost carriers] to invest in new capacity and provide legitimate competition to the remaining legacy carriers nationwide,” Kollar-Kotelly wrote.

Bill Baer, the assistant attorney general for the DOJ Antitrust Division, said in statement Friday evening: “We’re pleased that the court agreed that the department’s remedy will enhance system-wide competition in the airline industry.” Consumers, Baer said, “will have more choices to fly at more competitive airfares.”

As previously reported by The National Law Journal, US Airways was represented by O’Melveny & Myers partners Richard Parker, Henry Thumann and Kenneth O’Rourke; Dechert partner Paul Denis; and Cadwalader, Wichersham & Taft partner Charles “Rick” Rule.

American parent company AMR Corp. hired Jones Day partners John Majoras, Joe Sims, J. Bruce McDonald, Paula Render and Michael Fried and Paul Hastings partner M.J. Moltenbrey.

Contact Zoe Tillman at ztillman@alm.com. On Twitter: @zoetillman