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VOL. 37 | NO. 34 | Friday, August 23, 2013
US seeks to delay airline-merger trial until March
DALLAS (AP) — The U.S. government wants to wait until March for a trial on its lawsuit aimed at blocking the merger of American Airlines and US Airways, a deal that would create the world's biggest airline.
The airlines want to start the trial in November. They had hoped to close the merger next month, but that was before the U.S. Justice Department and six states filed the antitrust case two weeks ago.
The Justice Department said in a court filing Tuesday that given the stakes in the merger, it needs until March 3 to develop evidence and prepare for trial. It accused the airlines of rushing the case.
The companies did not immediately respond for comment.
The federal judge in Washington, D.C., who is hearing the case plans to hold a conference on the schedule Friday, but it's not certain that she will set a trial date then.
The government argues that the merger will reduce competition and drive up the cost of travel for consumers. It would leave more than 80 percent of the U.S. travel market in control of four airlines, down from five.
American, a unit of AMR Corp., and US Airways Group Inc. say that the merger will allow them to offer consumers more travel choices and a bigger route network than each provides now. They say that the deal would provide more competition by creating a third big rival to United Airlines and Delta Air Lines.
AMR has been operating under bankruptcy protection since November 2011. On Thursday, it will ask a federal bankruptcy judge in New York to approve its turnaround plan, which is pegged to the merger.
The Justice Department said that the airlines shouldn't be allowed to use the bankruptcy case to justify a quick trial on the antitrust lawsuit. It said that AMR and US Airways knew all along "that a merger of two large firms competing in already highly concentrated markets might draw an antitrust challenge."
On Monday, AMR reported a profit of $292 million for July. Excluding restructuring costs, it was the biggest one-month profit in the company's history, according to CEO Tom Horton. The Justice Department took note of that.
American's restructuring has been "extraordinarily successful," the department said, and the airline can "compete as a strong and vibrant standalone firm."