AMR
Corporation AAMRQ, the parent company of American Airlines, Inc., and
US Airways Group, Inc. LCC today announced that the airlines have
settled the litigation brought by the U.S. Department of Justice (DOJ), the
States of Arizona, Florida, Michigan and Tennessee, the Commonwealths of
Pennsylvania and Virginia, and the District of Columbia challenging the merger
of AMR and US Airways. The companies also announced an agreement with the U.S.
Department of Transportation (DOT) related to small community service from
Washington Reagan National Airport (DCA).
(Logo: http://photos.prnewswire.com/prnh/20131112/DA15293LOGO)
(Logo: http://photos.prnewswire.com/prnh/20130208/DA56847LOGO)
Tom Horton, chairman, president and CEO of AMR, and incoming chairman of the
board of the combined company, said, "This is an important day for our
customers, our people and our financial stakeholders. This agreement allows us
to take the final steps in creating the new American Airlines. With a renewed
spirit, we are about to create the world's leading airline that will offer,
along with our oneworld^® partners, a comprehensive global network and service
by the best people in the business. There is much more work ahead of us but
we're energized by the challenge and look forward to competing vigorously in
the ever-changing global marketplace."
Doug Parker, chairman and CEO of US Airways, and incoming CEO of the combined
airline, said, "This is very good news and we are grateful to all who have
made it happen. In particular, we are thankful to our employees, who
throughout this process continued to believe in a better future as one airline
and who voiced their support passionately and consistently. We also want to
thank the elected officials in the states and communities we serve, the
business leaders in our hub cities, and the thousands of customers who
endorsed and supported this effort. Thank you as well to the U.S. Department
of Justice, the state attorneys general and the U.S. Department of
Transportation. We are pleased to have this lawsuit behind us and look forward
to building the new American Airlines together."
Under the terms of the settlement, the airlines will divest 52 slot pairs at
Washington Reagan National Airport (DCA) and 17 slot pairs at New York
LaGuardia Airport (LGA), as well as certain gates and related facilities to
support service at those airports.[i] The airlines also will divest two gates
and related support facilities at each of Boston Logan International Airport,
Chicago O'Hare International Airport, Dallas Love Field, Los Angeles
International Airport, and Miami International Airport. The divestitures will
occur through a DOJ approved process following the completion of the merger.
Despite the divestitures, the new American is still expected to generate more
than $1 billion in annual net synergies beginning in 2015, as was estimated
when the merger was announced in February.
After completion of the required divestitures, the combined company expects to
operate 44 fewer daily departures at DCA and 12 fewer daily departures at LGA
than the approximately 290 daily DCA departures and 175 daily LGA departures
that American and US Airways operate today.[ii] The divestitures required by
the settlement are not expected to impact total employment at the new
American.
To ensure much of the service currently operated by the carriers to small- and
medium-sized markets from DCA is maintained, the new American has agreed with
the DOT to use all of its DCA commuter slot pairs for service to these
communities. The new American intends to announce the service changes that
will result from the divestitures in advance of the sale of the DCA and LGA
slots, so that the airlines acquiring those slots have the opportunity to
maintain service to those impacted communities.
In the settlement agreement with the state Attorneys General, the new American
has agreed to maintain its hubs in Charlotte, New York (Kennedy), Los Angeles,
Miami, Chicago (O'Hare), Philadelphia, and Phoenix consistent with historical
operations for a period of three years. In addition, with limited exceptions,
for a period of five years, the new American will continue to provide daily
scheduled service from one or more of its hubs to each plaintiff state airport
that has scheduled daily service from either American or US Airways. A
previous settlement agreement with the state of Texas will be amended to make
it consistent with today's settlement.
Completion of the merger remains subject to the approval of the settlements by
the U.S. Bankruptcy Court, and certain other conditions. The companies now
expect to complete the merger in December 2013.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in