American-US Airways seek international route transfers

Washington DC
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American Airlines and US Airways have requested government approval to transfer all of the smaller carrier's international route authorities to American when their proposed merger closes, as part of their preparations for the deal.

The carriers claim that the transfer and merger will benefit customers and improve competition - a line that they have maintained since announcing the deal on 14 February - in their filing with the US Department of Transportation (DOT) on 17 April.

"The merger, and the transfer to AA [American Airlines] and Eagle of US Airways', PSA's, and Piedmont's international route authorities, will generate substantial and important consumer and competitive benefits for US passengers and shippers," they say.

Piedmont Airlines and PSA are wholly-owned regional subsidiaries of US Airways.

In addition to the transfer, all American and American Eagle authorities would be expanded to cover US Airways and its subsidiaries, and US Airways would join American's joint ventures with British Airways and Iberia, Japan Airlines, LAN Airlines and LAN Peru, and Qantas Airways.

American and US Airways argue that the larger integrated network of the combined carrier will benefit competition across both the Atlantic and the Pacific, as well as to Latin America, in the filing.

The airlines note that the additional feed will "open the door to growth at additional Asia-Pacific destinations" at the combined carrier, which is a region where they lag well behind Delta Air Lines and United Airlines in terms of capacity and traffic.

The DOT request comes a day after American filed its reorganisation plan and disclosure statement with the US Bankruptcy Court for the Southern District of New York, and two days after it filed an S-4 outlining the proposed deal to US Airways shareholders with the US Securities and Exchange Commission (SEC).

The agency granted similar route authority transfers to Continental Airlines and United ahead of their merger in 2010, and to Delta and Northwest Airlines prior to their deal in 2008, according to the filing.