AMR Corp.’s American Airlines and US Airways Group Inc. won European Union approval for their merger creating the world’s largest carrier after they allayed concerns they would monopolize the London-Philadelphia route.
The duo agreed to give up the right to a daily round trip between London’s Heathrow, the EU’s busiest hub, and the U.S. city, the European Commission said in an e-mailed statement.
“In light of these comprehensive commitments, the commission concluded that the transaction would not raise competition concerns,” according to the statement.
The all-stock tie-up will have the heft to compete with United Continental Holdings Inc. and Delta Air Lines Inc., which also were created in a wave of consolidation that began in 2005 and swept up five of the 10 biggest U.S. carriers. American and US Airways expect to complete their merger this quarter, in conjunction with AMR’s exit from bankruptcy protection.
“We are very pleased that the EU has approved the merger between American Airlines and US Airways,” American Chief Executive Officer Tom Horton said in a statement. “This represents one of the final milestones in our path to becoming the new American Airlines.”
The two carriers agreed to merge in February, and will keep American’s name and Fort Worth, Texas, headquarters, while US Airways Chief Executive Officer Doug Parker will run the company. Horton will serve as chairman of the merged airline for a limited time.
The initial proposed deal would have created a monopoly through the joint venture between American, US Airways, British Airways and Iberia on the London-Philadelphia route, the commission said.
Arrivals and takeoffs from congested Heathrow are limited, and can only be made under flight slot awards to various airlines. US Airways operates a hub airport in Philadelphia.
The US Airways-American merger still must be approved by the court overseeing AMR’s bankruptcy and U.S. antitrust regulators.
US Airways shareholders and creditors in AMR’s bankruptcy earlier endorsed the merger.