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AMR in Settlement Talks With Florida Over Merger Suit

Six states plus the District of Columbia have joined the U.S. Justice Department's lawsuit seeking to stop the proposed merger of AMR Corp.'s American Airlines with US Airways Group Inc. Photographer: Sam Hodgson/Bloomberg
Six states plus the District of Columbia have joined the U.S. Justice Department's lawsuit seeking to stop the proposed merger of AMR Corp.'s American Airlines with US Airways Group Inc. Photographer: Sam Hodgson/Bloomberg

Nov. 2 (Bloomberg) -- American Airlines Chief Executive Officer Tom Horton met with Florida Attorney General Pam Bondi to discuss ending the state’s role in a U.S. lawsuit to block the carrier’s proposed merger with US Airways Group Inc.

“We are both hopeful that we will reach a timely resolution to benefit the residents of Miami and all Floridians and travelers to Florida,” Bondi said. Horton said in a statement that he was “hopeful that a resolution can be reached in the near future.”

Florida is among six states plus the District of Columbia that have joined the U.S. Justice Department’s lawsuit seeking to stop the merger of the airlines. They argue the combination would reduce competition and raise prices. Texas dropped out of the lawsuit last month.

The meeting is the latest step by the airlines and their employees to build public support for the merger and stress its benefits to U.S. Attorney General Eric Holder, congressmen and the federal judge overseeing the case. At least 100,000 letters of support have been sent to public officials and ads have run in major U.S. newspapers, the airlines said in an employee newsletter.

American’s parent AMR Corp. rose 7.5 percent to $7.90 at the close in New York yesterday, capping off a 27 percent gain for the week in the biggest such advance since February, amid mounting optimism that the deal would succeed. The merger is the basis of Fort Worth, Texas-based AMR’s plan to exit bankruptcy protection.

Productive Meeting

US Airways, which is based in Tempe, Arizona, climbed 2.1 percent yesterday to $22.44. That sent the stock to its ninth straight weekly increase, the longest such streak since May 2012, according to data compiled by Bloomberg.

Both Bondi and Horton described their meeting as “productive,” in e-mailed statements.

“We look forward to a thriving American Airlines that not only keeps but will create many jobs in our great state,” said Bondi.

Jenn Meale, a spokeswoman for Bondi, declined to comment further about the meeting.

Texas Attorney General Greg Abbott reached a settlement with the airlines Oct. 1 and dropped out of the lawsuit. The case is scheduled to begin trial Nov. 25 in federal court in Washington.

The airlines are also in exploratory talks with the Justice Department about settling the government’s lawsuit, two people familiar with the matter said Oct. 30.

The airlines are offering to divest gates and landing and takeoff rights at Washington’s Reagan National Airport as part of a settlement package, one of the people said. The talks are still preliminary and may not lead to a settlement, the people said.

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

To contact the reporters on this story: 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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