Reuters reports a federal judge has rejected the claim by consumers and travel agents to stop the merger of US Airways and American Airlines. With the judge’s decision there is nothing else standing in the way for the move forward to merge American’s parent AMR Corp and US Airways Group Inc, creating the world’s largest airliner carrier.
This merge, according to opponents, could lead to “irreparable harm” and could lead to an increase in air travel prices, lower competition and limited service. They also claim it could lead to increased crowding on certain flights. The plaintiffs also argued that this merger is especially worrisome given the other mergers of “mammoth” airlines in the past five years, especially the merger of United Airlines and Delta Air Lines.
Proponents argue, however, that the previous mergers made it a foregone conclusion that this specific merger should be approved. The Justice Department had put themselves in what one economics professor called an “indefensible position” by already approving a “super-Delta and a super-United,” making it difficult for these two airlines to compete effectively in the airline market.
Friday at the hearing, however, Chief Judge Loretta Preska of the U.S. District Court in Manhattan, decided that the plaintiffs did not prove their case, and the merger would not lead to irreparable harm. Although the plaintiffs intend to appeal the decision, the judge refused to suspend her ruling pending the appeal.
When will the American Airlines merger be completed?
According to American Airlines reports, they hope to have the merger completed by December 9 of this year. In the settlement, the airlines agreed to shed gates and landing spots and several airports across the United States.
This ruling clears the way for the merger to move forward. This deal, however, was not without a fight. US Airways and American Airlines had to fight issues raised by the Justice Department which delayed the merger for months.
Why is the American Airlines merger needed?
According to AMR and US Airways, the merger between the two airlines will help them compete in the current market. American Airlines and US Airways hope to streamline their airline business and avoid some of the issues which have plagued the last decade: high priced airline fuel, bankruptcy, and pilot/management feuds.
While there were many who argued against the merger, most groups seem to be happy, including the airline executives and other labor groups. Some airlines are also excited. According to the agreement, some airlines including upstarts such as JetBlue, Allegiant and Spirit may have greater access to some airports.
According to Reuters, “Under the deal announced on Tuesday, US Airways and American Airlines agreed to sell 104 take-off and landing slots at Reagan National and 34 at La Guardia, along with supporting gates and ground facilities.”
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