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November 21, 2013

Antitrust attorney files for a temporary restraining order to block American-US Airways merger

San Francisco attorney Joseph Alioto asked the bankruptcy court for a temporary restraining order to block the American Airlines-US Airways merger.

In a filing made with the court on Thursday, Alioto and his clients who had filed a private antitrust lawsuit in August to try to stop the merger, argued that the merger was anti-competitive and would allow 80 percent of the air travel market to be dominated by only three carriers.

"The proposed merger will create undue concentration in the airline industry in the United States and “may” result in increases in fares, reduction of capacity and availability of flights, reduced services, charges for amenities, loss of jobs, elimination of consumer choice, and other anti-competitive practices and effects similar to those that followed the mergers of Delta and Northwest in 2008, United and Continental in 2010, and Southwest and AirTran in 2011," the filing said.

Alioto said he wants to discuss the injunction at the previously scheduled bankruptcy hearing set for Monday. At that hearing, U.S. bankruptcy judge Sean Lane will consider approving American and US Airways' settlement agreement with the U.S. Department of Justice and if he approves the deal, it would allow American's parent company, AMR Corp. to emerge from bankruptcy and merge with US Airways.

He also filed an objection to the settlement agreement and was the only party to object to the settlement deal. Alioto, who has filed antitrust suits to try to stop other airline mergers in the past, argued the settlement does not alleviate antitrust concerns.

"The DOJ settlement is cosmetic, as Debtors readily admitted. The Debtors will not suffer any significant divestiture of assets, nor significant change of their business operations," the filing said.

None of AMR's creditors filed an opposition to the settlement, however, American's unions filed a brief in support of the settlement.

"The Employees of American have sacrificed much to permit this reorganization and should not have to wait longer before their airline can compete with a network equal to others," the filing said, encouraging the judge to approve the settlement agreement.

-Andrea Ahles



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