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November 04, 2013

AG Holder says settlement talks with American-US Airways focus on slot divestitures at airports

U.S. Attorney General Eric Holder said the government is in settlement talks with American Airlines and US Airways that would include divestitures of takeoff and landing slots at key airports across the country.

According to several media reports, Holder said the Justice Department will not agree to a settlement that doesn't resolve competition concerns the government raised in its initial antitrust complaint.

"What we have tried to focus on is to make sure that any resolution in this case necessarily includes divestitures of facilities at key constrained airports throughout the United States," Holder said at a press conference in Washington, Bloomberg News reported.

Holder did not say how many slots the government wanted the airlines to give up in exchange for dropping the antitrust suit. This Reuters article says Holder confirmed talks between the two sides are ongoing.

A trial is scheduled to begin on November 25 in federal court in Washington D.C.

The airlines declined to comment specifically on Holder's comments.

"Any discussions about settlement to resolve this litigation, whether internal, with DOJ directly or through the mediator would be private and we are not going to comment on them in any way," the airlines said in a joint statement on Monday.

Shares of American's stock are up almost 20 percent in midday trading on the news of settlement talks. The stock [ticker:AAMRQ] is trading around $9.37 a share on over-the-counter markets on Monday around 12:30 p.m. CST.

GimmeCredit analyst Vicki Bryan told investors she expected the DOJ to push for multiple slot divestitures as part of settlement talks.

"We continue to expect this dispute to be resolved via negotiated settlement, potentially before the trial even starts but no later than yearend, paving the way for the merger to close immediately thereafter," Bryan said in a research note sent to investors on Monday.

-Andrea Ahles


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Holder is trying to portray his merger demands as being good and reasonable. What he really is saying is for US Airways and American Airlines to fall on their swords and die. This is a game he is playing since Holder recognizes that DOJ's position on the mergers has been taking a big beating in the press. I believe the DOJ's position is completely unreasonable and politically based. I think the Judge will see through the DOJ's dishonest attempt to destroy any attempts by US Airways and American Airlines to compete against United( Holder's hometown Chicago airline) and Delta.


There was an online article which stated "Did American Airlines And US Airways Get A Green Light To Merge?"
But when you look closely at what the DOJ is doing you can clearly see that they have no intentions of allowing a merger which would leave any of the individual component airlines survive intact. What they want is for one of the airlines to take the poison pill and die. That means thousands of jobs that many hardworking people will lose all because of the political wims of the DOJ headed by Eric Holder. I do not know how these people can look at themselves in the mirror when they wake up in the morning. This is really a perfect example of governmental abuse of power. Picking and choosing who will win in the market place.

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