On Aug. 5, the Antitrust Division of the U.S. Department of Justice surprised some industry observers when it filed suit to challenge the merger of US Airways and American Airlines. On Tuesday, the DOJ reached a preliminary agreement to settle the suit through divestiture of gates and slots at seven airports across the country. When American and US Airways announced the merger, many thought (including the merging parties) that this was the last piece of the legacy airline consolidation story after the Continental-United (2010) and Delta-Northwest (2008) mergers.
The DOJ disagreed. The assistant attorney general, in prepared remarks coinciding with the filing of the suit, said: “We simply cannot approve a merger that would result in U.S. consumers paying higher fares, higher fees and receiving less service.” The airlines fired back with one of the lawyers for the airlines, stating, “We are litigating this case, period.” The trial was scheduled to begin in federal court in Washington, D.C., on Nov. 25 before Judge Colleen Kollar-Kotelly. The trial was expected to last 10-15 days with the court making a ruling in January after the parties submitted post-trial briefing. The government’s lawsuit and the defendants’ answer to the complaint set forth the issues. Briefly summarized, the competing views of a post-merger world were:
