AMR-US Airways Said to Settle U.S. Merger Antitrust Suit

Nov. 12 (Bloomberg) -- Bloomberg Washington correspondent Phil Mattingly reports that a settlement has been reached between American Airlines, US Airways Group and federal regulators seeking to block their $17.2 billion merger. He speaks on Bloomberg Television’s “Market Makers.”

American Airlines and US Airways Group Inc. have reached a settlement with federal regulators in the U.S. lawsuit seeking to block their $17.2 billion merger, a person familiar with the matter said.

A proposed agreement with the Justice Department is set to be announced today, the person said, asking not to be identified because the negotiations are private. The deal would require a judge’s approval.

The agreement puts the airlines back on track to combine, bringing American parent AMR Corp. out of bankruptcy and creating the world’s largest carrier. The U.S. sued to block the combination, saying it would harm consumers by reducing competition and raising ticket prices. The airlines maintain a merger is the only way they can compete with larger United Continental Holdings Inc. and Delta Air Lines Inc.

AMR rose as much as 42 percent to $13.50 in over-the counter trading. US Airways jumped as much as 9.5 percent to $25.49 in New York before trading was halted.

The carriers have agreed to surrender slots at Washington’s Reagan National airport to help address Justice Department concerns over the merger, people familiar with the negotiations said earlier.

Gates Surrenders

AMR and US Airways also have agreed to surrender an unspecified number of gates at Los Angeles International and Chicago O’Hare airports, the people said. Although those facilities are not subject to federal slot controls, available gate space is limited.

Photographer: Andrew Harrer/Bloomberg

A US Airways Group Inc. airplane takes off behind AMR Corp.'s American Airlines airplanes at Reagan National Airport in Washington, D.C. Close

A US Airways Group Inc. airplane takes off behind AMR Corp.'s American Airlines... Read More

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Photographer: Andrew Harrer/Bloomberg

A US Airways Group Inc. airplane takes off behind AMR Corp.'s American Airlines airplanes at Reagan National Airport in Washington, D.C.

Thirty-seven slot pairs at Reagan would be surrendered to the U.S. under the current plan, and eight pairs would be sold, the people said, without naming a possible buyer. JetBlue Airways Corp., which has called on U.S. regulators to force the divestiture of Reagan slots before allowing the merger, currently leases eight pair from American.

The antitrust case is U.S. v. US Airways Group Inc. (LCC), 13-cv-01236, U.S. District Court, District of Columbia (Washington).

To contact the reporters on this story: Sara Forden in Washington at sforden@bloomberg.net; David McLaughlin in Washington at dmclaughlin9@bloomberg.net; Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Ed Dufner at edufner@bloomberg.net

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