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DoJ Folds, American Airlines And US Airways Merger Approved
Following the DoJ's 'surprising' August decision to block the $11bn merger of American and US Airways (after approving other airline mergers in the recent past), it would appear the parties have reached a settlement:
- *U.S. FILES PROPOSED SETTLEMENT IN AMR CASE IN FEDERAL COURT
- *DOJ REQUIRES US AIRWAYS, AMERICAN AIRLINES TO DIVEST FACILITIES
- *AIRPORT SLOTS TO BE SOLD UNDER PROCESS APPROVED BY U.S.
- *AMR SEES COMBINED CO OPERATING 12 FEWER DAILY DEPARTURES AT LGA
- *AMR SEES COMBINED CO OPERATING 44 FEWER DAILY DEPARTURES AT DCA
Some of the initial details (Full statement below) include divesting slots at Laguardia and Reagan National. AMR is trading up over 25%...
Via Reuters:
- SETTLEMENT SAYS LAGUARDIA DIVESTMENTS INCLUDE 34 SLOTS, CONSISTING OF 24 HELD BY AMR OR US AIRWAYS, AND 10 LEASED BY AMR TO SOUTHWEST AIRLINES CO
- SETTLEMENT SAYS REAGAN NATIONAL DIVESTMENTS INCLUDE 104 SLOTS HELD BY US AIRWAYS OR AMR, INCLUDING 16 LEASED BY AMR TO JETBLUE AIRWAYS CORP
AMR Corporation And US Airways Announce Settlement With U.S. Department Of Justice And State Attorneys General
Settlement Allows for Completion of Merger in December
PR Newswire
FORT WORTH, Texas and TEMPE, Ariz., Nov. 12, 2013
FORT WORTH, Texas and TEMPE, Ariz., Nov. 12, 2013 /PRNewswire/ -- AMR Corporation (OTCQB: AAMRQ), the parent company of American Airlines, Inc., and US Airways Group, Inc. (NYSE: LCC) today announced that the airlines have settled the litigation brought by the U.S. Department of Justice (DOJ), the States of Arizona, Florida, Michigan and Tennessee, the Commonwealths of Pennsylvania and Virginia, and the District of Columbia challenging the merger of AMR and US Airways. The companies also announced an agreement with the U.S. Department of Transportation (DOT) related to small community service from Washington Reagan National Airport (DCA).
Tom Horton, chairman, president and CEO of AMR, and incoming chairman of the board of the combined company, said, "This is an important day for our customers, our people and our financial stakeholders. This agreement allows us to take the final steps in creating the new American Airlines. With a renewed spirit, we are about to create the world's leading airline that will offer, along with our oneworld^® partners, a comprehensive global network and service by the best people in the business. There is much more work ahead of us but we're energized by the challenge and look forward to competing vigorously in the ever-changing global marketplace."
Doug Parker, chairman and CEO of US Airways, and incoming CEO of the combined airline, said, "This is very good news and we are grateful to all who have made it happen. In particular, we are thankful to our employees, who throughout this process continued to believe in a better future as one airline and who voiced their support passionately and consistently. We also want to thank the elected officials in the states and communities we serve, the business leaders in our hub cities, and the thousands of customers who endorsed and supported this effort. Thank you as well to the U.S. Department of Justice, the state attorneys general and the U.S. Department of Transportation. We are pleased to have this lawsuit behind us and look forward to building the new American Airlines together."
Under the terms of the settlement, the airlines will divest 52 slot pairs at Washington Reagan National Airport (DCA) and 17 slot pairs at New York LaGuardia Airport (LGA), as well as certain gates and related facilities to support service at those airports.[i] The airlines also will divest two gates and related support facilities at each of Boston Logan International Airport, Chicago O'Hare International Airport, Dallas Love Field, Los Angeles International Airport, and Miami International Airport. The divestitures will occur through a DOJ approved process following the completion of the merger. Despite the divestitures, the new American is still expected to generate more than $1 billion in annual net synergies beginning in 2015, as was estimated when the merger was announced in February.
After completion of the required divestitures, the combined company expects to operate 44 fewer daily departures at DCA and 12 fewer daily departures at LGA than the approximately 290 daily DCA departures and 175 daily LGA departures that American and US Airways operate today. The divestitures required by the settlement are not expected to impact total employment at the new American.
To ensure much of the service currently operated by the carriers to small- and medium-sized markets from DCA is maintained, the new American has agreed with the DOT to use all of its DCA commuter slot pairs for service to these communities. The new American intends to announce the service changes that will result from the divestitures in advance of the sale of the DCA and LGA slots, so that the airlines acquiring those slots have the opportunity to maintain service to those impacted communities.
In the settlement agreement with the state Attorneys General, the new American has agreed to maintain its hubs in Charlotte, New York (Kennedy), Los Angeles, Miami, Chicago (O'Hare), Philadelphia, and Phoenix consistent with historical operations for a period of three years. In addition, with limited exceptions, for a period of five years, the new American will continue to provide daily scheduled service from one or more of its hubs to each plaintiff state airport that has scheduled daily service from either American or US Airways. A previous settlement agreement with the state of Texas will be amended to make it consistent with today's settlement.
Completion of the merger remains subject to the approval of the settlements by the U.S. Bankruptcy Court, and certain other conditions. The companies now expect to complete the merger in December 2013.
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DoJ just had to secure their cut before allowing it to proceed
How much you think the DoJ spent to keep us safe ?
Fewer flights, higher fares, less competition, poorer service. #winning #obamerica
yyyeeessss....SCORE!!!!!!!
i knew they'd cave!!!
i win!!
gonna have to do some math and figure out how much i made...awesome...make my day
It's the New New Alchemy.
Put two turds together.....and get GOLD, bitchezz !
The deathclock starts today for this new entity -- just marking time before declaring bankruptcy for the umteenth time.
The commercial airline business model depends on bankruptcy in order to remain an ongoing concern. If they can't discharge debt and sever obligations, they can't keep air under the wings.
It's not a monopoly as long as Joe Richmond in Arkansas operate that 2-seater Cessna.
Being politically unpalateble and flying in small planes. Not healthy.
That's Me!
I haven't flown American for a while but U.S. Air SUCKS! I flew United to Hawaii a few years ago, and they also sucked! Domestic U.S. airlines can't hold a candle to the service you get on International carriers.
http://en.wikipedia.org/wiki/List_of_largest_airlines_in_North_America
Anything with a pulse/headline and all the rats pile on. Pathetic ZIRP wasteland!
http://finance.yahoo.com/q?s=AAMRQ
Amen to that. Stopped flying U S(uck) Air years ago.
All evidence of the collapse and Peak Oil. Not enough cheap energy and non-business class customers flush with cash to keep a lot of airlines afloat.
Which of course means more price gouging by the remainders. Too bad I still can't carry any more than 3 oz. of lube with me. Gonna need more.
You could have just stopped at pretty much stopped flying. After installation of the TSSA under the DHSS, it's my way of making the economy and the airlines pay the price. Vote with your wallet!
Have not flown since the advent of the TSA. Will never fly again. Fuck the airlines.
Wish I could stop....but it's a requirement for half the year with my job. International as well.
Good thing Merica loves competition & free-enterprise so much.
...especially, when those enterprises donate to political parties.
Just locking Americans down. Fewer choices, fewer planes, smaller seats, more connections via regional airplanes. Let's not forget the boarding requirements of stirp search.
And just who buys these open slots? Notice how they end up being vacated at airports? They don't fill them with new airlines. I wouldn't doubt they are sold to LLC's of the very airline that "sold" them.
Yes, now the TSA will be the fun part of air travel.
Yeah, more "monopolistic competition" is a good thing for Capitalism (NOT).
These kinds of M&A are the death of Capitalism, which requires COMPETITIVE MARKETS. In fact, the primary economic role of government in a Capitalistic economy is to ensure competitive markets. Our government does the opposite. Is it any wonder we live under Kleptocratic Corporate Fascism?
M&A means more S&M for consumers.
The 10 corporations that "rule the world."
Look here
With all those gates being divested, there will be a great chance for bribery, collusion, party financing and other shenanigans to take place. Welcome to the real world!
Had to get out all the Bribers...I mean consultants to get this one passed...lots of frequent flier miles were given out I bet...
check second to last paragraph- the true reason this was blocked--congressman want air service maintained to their hometown from reagan so they dont have to connect! political shakedown
Spot on.
Another celebratory DUI for Doug Parker in the near future? C'mon Doug, make it #4 for old times sake!
On a separate note, get ready for at least 7,000 layoffs, maybe as high as 12,000. Woohoo! Merger approved! Union approved! EU Approved! DOJ approved! Consumer app...oh, now just wait a damn minute...
I guess they finally bribed the right Congressmen and the DNC with sufficiently serious money.
Or, maybe the NSA showed the right pictures, websites, and phone transcripts to the right influential people.
Fuck the airlines. Have not flown since TSA started offering free finger fucking and radiation(thanks Chertoff you fucking zombie). I don't plan on flying anytime soon unless it's a last resort.
Kids learn a helluva lot more on a road trip stopping every so often so see the stuff many folks don't even know is out there, plus I can take some firepower along. States that don't have reciprocity I simply avoid, they can kiss my tourist dollars good bye.
Flying USED to be an adventure, I remember as a kid back in the mid to late 70's on a couple of flights, one in a Martin 4-0-4 and the other a DC-10, the pilots actually let me INSIDE the cockpit, during flight, sparking my love of avation. The food was real, the flights attendants actually gave a shit and none of them were ferries.
Today, just a mass mode of transport for the cattle where they fuck you with fees at every corner they can. The only time I fly is if it's a Kingair or other smaller twin where I share the fare with others, main drawback is we don't go as far of course.