US aims to use March trial to block airline merger
Print Edition
The US government wants to wait until March for a trial on its lawsuit aimed at blocking the merger of American Airlines and US Airways, a deal that would create the world’s biggest airline.
The airlines want to start the trial in November. They had hoped to close the merger next month, but that was before the US Justice Department and six states filed the antitrust case two weeks ago.
Justice said in a court filing on Tuesday that given the stakes in the merger, it needs until March 3 to develop evidence and prepare for trial. It accused the airlines of rushing the case.
The lawsuit is the last obstacle preventing American Airlines parent AMR Corp from closing the merger and emerging from nearly two years of bankruptcy protection.
In a written statement, AMR and US Airways Group Inc said the government’s request was slow and unreasonable after a Justice investigation that they say lasted 16 months. The carriers approached the department before the deal was publicly announced in February.
“Unnecessary delays also prevent American’s financial stakeholders, which include creditors, shareholders and employees, from realizing the benefits and improved certainty that will come from American’s emergence” from bankruptcy, they said.
Justice said that the airlines shouldn’t use the bankruptcy case to justify a quick trial on the antitrust lawsuit. It said that AMR and US Airways knew all along that an antitrust challenge was possible.
Colleen Kollar-Kotelly, the federal judge in Washington DC, who is hearing the case, plans to hold a conference on the trial schedule tomorrow.
Justice originally sought a February 10 start, but pushed it back after the judge said she had a long criminal trial scheduled to begin on January 14.
The government argues that the merger will cut competition and drive up the cost of travel for consumers. It would leave more than 80 percent of the US travel market under control of four airlines, down from five.
On Monday, AMR posted a profit of US$292 million for last month.
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