Will American and US Airways Get an Answer at November Trial?
AMR Corp.’s (AAMRQ.PK) American Airlines and US Airways (NYSE:LCC) have requested a 10-day trial beginning November 12 for the companies to fight against the U.S. Justice Department to secure a merger the airlines have been planning for months.
In a court filing seen by Reuters, the companies said the date would give the U.S. Department of Justice 90 days to prepare its case. The Justice Department requested 180 days, but the carriers pointed out that particular amount of time is significantly longer than other merger trials. According to the filing, other government merger challenges took between 17 days and 105 days from the filing of a complaint to the start of the trial.
The proposed merger would create the world’s largest airline and pull AMR Corp. out of bankruptcy. Justice Department approval was the final step the companies had before they could move forward with the merger, having already made antitrust concessions to the European Union and receiving approval from AMR Corp.’s creditors.
The merger is the only way that AMR Corp. currently sees fit to get out of bankruptcy, one reason the companies said they need an earlier trial date. Bankruptcy judge Sean Lane is set to hear AMR Corp.’s new course of action Friday after refusing to sign off on the merger last week because of the government’s suit. One AMR Corp. union has already filed papers with the bankruptcy court, claiming that the Justice Department’s suit shouldn’t stop Lane from signing off on the plan, Reuters reports.
Last week, the U.S. Department of Justice and six states sued to stop the merger, which is believed would reduce competition and raise airfare for consumers. AMR Corp. and US Airways say the merger would actually stimulate competition, as it would allow the new company to better compete with United Continental Holdings (NYSE:UAL) and Delta Air Lines (NYSE:DAL), both of which have undergone mergers and acquisitions in recent years to create larger airlines.
On Thursday, officials from Texas, Florida, and North Carolina came out in support of the merger. These states are major hubs for the airlines, and officials believe the merger would help grow their local economies.
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