Airlines say US case against big merger is flawedBy DAVID KOENIG
The Associated Press | September 12,2013DALLAS — American Airlines and US Airways say that the government’s opposition to their planned merger shows that it doesn’t understand the airline industry.
The Justice Department and several states sued last month to block the merger, on the grounds that it would hurt consumers.
The airlines said in court filings that the U.S. Justice Department’s analysis of the merger ignores competition that now exists from low-cost carriers such as Southwest. American says that the government instead relies on “anecdotes involving small numbers of passengers” and an idealized but outdated vision of the industry.
Also, the CEOs of each airline promised to ask his board of directors to approve extending the February merger agreement beyond its mid-December expiration date, said three people familiar with the situation.
An extension could be significant because a trial on the government’s lawsuit against the merger is scheduled to begin Nov. 25, and there might not be a decision until after the December deadline. The airlines are eager to show the Justice Department that the merger won’t die just because the government has succeeded in delaying it with the lawsuit, two of the people said.
The people spoke on condition of anonymity because the plan to extend the merger agreement came up during private discussions between US Airways CEO Doug Parker, the CEO of American parent AMR Corp., Tom Horton, and AMR’s bankruptcy creditors.
The extension was first reported by The Wall Street Journal.
In filings late Tuesday with a federal court in Washington, the airlines raised familiar arguments to support the merger, which would create the world’s biggest airline. They said that it would offer customers more flight options and improve competition by creating a stronger rival to the nation’s biggest carriers, United and Delta.
In its August lawsuit, the Justice Department argued that the merger between AMR and US Airways Group Inc. would reduce competition and lead to higher prices. It also said the combined carrier would have too much power at Reagan National Airport outside Washington.
The airlines complained in their filings that the government did not block several other airline mergers in the past decade. The Justice Department considers that irrelevant, and has said that American and US Airways are doing well enough to succeed without merging. The airlines believe that view is shortsighted. US Airways said that the two companies lost $13.7 billion in the last 12 years.
The airlines had until Tuesday to file responses to the latest version of the government’s lawsuit.MORE IN National / World BusinessEric Mallette has worked at the Paramount Theatre in Rutland for 12 years and helped bring a... Full StoryThink pancakes and waffles and you most likely think maple syrup. But beer? Full StoryThe recent Kauffman Index of Startup Activity ranked Vermont as number five in the nation for... Full Story
- Most Popular
- Most Emailed
- RICHARD'S POOR ALMANACK: On this day 1739, 'Richard Palmer' identified in prison at York Castle as the notorious outlaw DICK TURPIN; IN 1836, Battle of the Alamo begins near San Antonio de Bexar, Texas; 1896, the Tootsie Roll invented by LEO HIRSCHFELD.
- RICHARD'S POOR ALMANACK: On this day in 1472, Orkney, Shetland islands put up as collateral by Norway to Scotland in lieu of dowry for MARGARET OF DENMARK on her marriage with JAMES III, king of Scotland; 1962, JOHN GLENN first American to orbit Earth.
- TOMORROW'S HEADLINES TODAY: City mayoral candidates debate campaign issues; Hartford, Conn., woman still missing; Neal Goswami reports attempts to legislate suicide; local woman loses 100 pounds through TOPS program.
- RICHARD'S POOR ALMANACK: On this day in 1878, JOHN TUNSTALL murdered near Lincoln, New Mexico, by the outlaw JESSE EVANS; in 1930, ELM FARM OLLIE first cow to fly in aircraft, first to be milked airborne; 1955, nuke test WASP; '79, snow in Sahara.
- TOMORROW'S HEADLINES TODAY: Rutland Herald News Editor Alan J. Keays and staff writer Gordon Dritschilo discuss stories planned for the February 18, 2015, edition of the newspaper: Winter budgets maxed, legal marijuana, Springfield bank job, USPS slowdown
- RICHARD'S POOR ALMANACK: On this day in 1249 AD, ANDRE of LONGJUMEAU is dispatched by LOUIS IX of France to meet the KHAGAN, ruler of the Mongol Empire; in 1804, during 1st Barbary War, STEPHEN DECATUR scuttles the pirate-held USS Philadelphia in Tripoli.