Week ahead: Final approach for airline merger

US Airways and American Airlines will attempt to bring their attempt to merge into the world’s largest airline in for a landing after clearing the last major hurdle that was facing their proposed combination last week.

A U.S. bankruptcy judge signed off on a deal between the airlines and the Department of Justice to exchange flights at airports in Washington, D.C. and New York City for the agency’s approval of the companies’ plans to merge.

US Air and American have said they will close their merger on Dec. 9, leaving just this week to put the finishing touches on a deal the airlines now value at $17 billion.


The merger is both the culmination of a two-year bankruptcy proceeding for American Airlines and a continuation of a trend toward consolidation that has drastically altered the U.S. aviation industry in recent years.

The Justice Department settlement that was at the center of the final months of negotiations on the proposed US Air-American merger requires the airlines to give up 54 pairs of flights at Washington, D.C.’s Ronald Reagan National Airport and 17 routes at New York LaGuardia Airport.

The airlines will also have to continue operating hubs at airports in Dallas, Phoenix, Philadelphia, New York, Los Angeles, Miami and Charlotte for at least three years.

The Justice Department had argued that without the changes to the US Air and American flight schedules, the airlines’ proposed merger would violate federal antitrust laws and result in higher prices for airline mergers.

The airlines countered that they needed to be able to merge to compete with other airlines that have been allowed to combine forces in recent years, citing Delta and Northwest airlines, United and Continental, and Southwest and AirTran Airways, which have all been allowed to join together since 2008.