US Airways Gets U.S. Request for More Data on AMR Merger
US Airways Group Inc. (LCC) said the U.S. Justice Department extended an antitrust review of its proposed merger with American Airlines parent AMR Corp. (AAMRQ), asking the companies for more information.
The airlines said they will continue cooperating with the antitrust division as it conducts its review of the proposed merger. The deal is still expected to close in the third quarter of 2013, the companies said in a statement, as American Airlines emerges from bankruptcy.
The request for more information is standard procedure under U.S. antitrust law if the agency reviewing the acquisition needs more time to study its possible impact on the market.
“Given the size and importance of this transaction, it was a foregone conclusion that the Justice Department would issue a second request,” said Alison Smith, a partner with McDermott Will & Emery in Houston, who previously worked as an antitrust lawyer at the department.
The combination of the two companies would create the world’s largest airline based on passenger traffic, displacing United Continental Holdings Inc.
American, based in Fort Worth, Texas, and Tempe, Arizona- based US Airways announced their merger agreement on Feb. 14.
Smith said that judging from previous mergers approved in the past five years, the deal is likely to be cleared after requiring the companies to give up some flight slots.
Such divestitures might include gates at Ronald Reagan Washington National Airport, according to analysts surveyed by Bloomberg. The combined US Airways-American would account for 67 percent of departures from Reagan.
“There’s very little overlap between the two route networks,” US Airways Chief Executive Officer Doug Parker said in an interview that aired today on Bloomberg Television’s “Street Smart” with Adam Johnson. “We feel very good about it being approved, but we need to do that work and are happy to do it.”
Gina Talamona, a spokeswoman for the Justice Department, confirmed the transaction is under review and declined to comment on the second request.