Those of us in Texas probably didn't spend much time watching the Virginia governor's race this fall.
But one Wall Street analyst thinks the loss by Virginia's attorney general Ken Cuccinelli may affect the American Airlines-US Airways merger.
Cuccinelli is one of six state attorney generals who have sued to stop the merger in conjunction with the U.S. Department of Justice's antitrust complaint. Cuccinelli, who had hoped to become Virginia's next governor, lost to Terry McAuliffe on Tuesday.
Virginia is also home to Reagan National Airport. Government regulators have expressed concern that the combined American-US Airways would have too many take-off and landing slots at Reagan and divestiture of those slots are likely to be involved in a possible settlement deal.
"We think pressure is mounting on regulators at the state and federal levels to reach a settlement with the airlines, and we would place significant value on a settlement with the Commonwealth of Virginia given the fact that DCA is located in that state, and DCA concentration is seemingly the most contentious and solvable issue in the DoJ’s complaint, in our view," Wolfe Research analyst Hunter Keay told investors in a research note on Thursday. "Assuming politics were involved in Mr. Cuccinelli’s decision to join the DoJ complaint we think his loss this week in the Governor’s race should slightly improve the chances of a settlement between the airlines and Virginia and would in turn cause observers to raise their probabilities of a deal getting done."
An antitrust trial is scheduled for November 25 in federal court in Washington D.C. U.S. Attorney General Eric Holder confirmed on Monday that settlement talks between the two sides are "ongoing."