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US Airways and American reach settlement with US DOJ

American Airlines and US Airways have announced that they have reached a settlement with the US Department of Justice (DOJ) in the government’s challenge of its proposed merger, with the airlines now expecting to complete the transaction in December.

Court approval of the merger would alleviate DOJ’s competitive concerns about the merger and the subsequent lawsuit, which was filed against the carriers in mid-August.

“We are pleased to have this lawsuit behind us and look forward to building the new American Airlines together,” says Doug Parker, chairman and chief executive of US Airways, and chief executive of the new combined carrier.

Pending court approval, the settlement requires the two airlines to divest 52 slot pairs at Washington’s Reagan National airport and 17 slot pairs at New York LaGuardia Airport to low-cost carriers, including “certain gates and related facilities” at the airports. The merged carrier also must divest two gates and support facilities at Boston Logan airport, Chicago O'Hare airport, Dallas Love Field, Los Angeles airport and Miami airport.

This will mean that the new combined airline will operate 44 fewer departures at National airport and 12 fewer departures at LaGuardia than each carrier operates now, says the release. Altogether, American and US Airways operate 290 daily departures from National and 175 daily departures from LaGuardia.

The settlement will increase the presence of low-cost carriers at these airports and allow them to add new capacity, says the DOJ.

“This agreement has the potential to shift the landscape of the airline industry,” says Attorney General Eric Holder. By guaranteeing a bigger foothold for low-cost carriers at key US airports, this settlement ensures airline passengers will see more competition on nonstop and connecting routes throughout the country.”

Six state attorneys general from Arizona, Florida, Pennsylvania, Michigan, Tennessee, Virginia and the District of Columbia participated in the proposed settlement.

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