American Airlines Merger Settlement Approved

(RTTNews) - A federal judge approved Friday the settlement between U.S. government and the airlines that joined in a merger to create the world's largest airline.

U.S. District Judge Colleen Kollar-Kotelly in Washington signed off on the settlement after deciding that it was in the public interest. "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", the Judge said. "With the settlement, the department is requiring an unprecedented number of divestitures in this industry that will provide enhanced competition across the nation,"Assistant Attorney General William Baer in charge of the Department of Justice's Antitrust Division stated.

In August, the U.S. Justice Department sued to block the merger of AMR Corp. (AAMRQ.PK), the parent company of American Airlines (AAL), and US Airways (LCC), saying it would hurt consumers by removing any incentive for US Airways to lower fares. States of Arizona, Florida, Tennessee, and Texas, the Commonwealths of Pennsylvania and Virginia, and the District of Columbia filed a civil antitrust in U.S. District Court for the District of Columbia.

In November, both the sides reached a settlement, which required US Airways and American's parent corporation, AMR Corp. to divest slots and gates at certain constrained airports across the country to low cost carrier airlines in order to increase competition. American Airlines' parent AMR Corp. and US Airways completed the merger in December.

"We're pleased that the court agreed that the department's remedy will enhance system-wide competition in the airline industry," Baer said. "History has shown that when low cost carriers have entered the market, consumers benefit."

The settlement calls for 104 air carrier slots at Washington's Reagan National Airport and 34 at New York's LaGuardia Airport to be sold, along with gates at five airports.

The concerned slots and facilities have been or are in the process of being divested to Southwest Airlines (LUV), JetBlue Airways (JBLU), and Virgin America.