Twelve routes.Out of the 900 routes operated by American Airlines and US Airways, there are only 12 where the two airlines compete against each other.And it is those 12 routes (called city-pairs in the industry) that the Department of Justice is scrutinizing as part of its antitrust review of the carriers' merger agreement. With so few overlaps, industry analysts say government regulators are likely to approve the deal in the next few months.However, the Justice Department could ask the newly combined carrier to give up a few takeoff and landing slots in Washington, D.C., and New York, a move it has required in other airline mergers, before giving its blessing to the American-US Airways union.Post-merger, analysts say, the new American would own two-thirds of the slots at Reagan National Airport and 30 percent of the slots at LaGuardia."If they think there's a problem and conclude the transaction would reduce competition, that's when the DOJ makes these selective requirements to divest routes or slots," said Alison Smith, an antitrust attorney at McDermott Will & Emery in Houston and formerly of the Justice Department's antitrust division.The review processBefore American and US Airways announced their merger in February, the two carriers filed a Hart-Scott-Rodino review application with the Justice Department on Jan. 31.About a month later, the Justice Department asked for additional information in what is known as "a second request." Currently, attorneys at both airlines are putting together thousands of documents related to how they operate, which routes they fly and how they determine fares -- all in response to broad questions from the Justice Department."They're really interested in the markets that US Airways and American compete on with their routes, and how often does that happen, and how much will that reduce competition," said Stan Liebowitz, an economics professor in the University of Texas at Dallas' Naveen Jindal School of Management.Government attorneys are also looking at whether or not the merger will be good for consumers, particularly if it gives travelers access to more destinations and larger networks. American CEO Tom Horton and US Airways CEO Doug Parker, who will run the combined carrier, have touted the merger's $1 billion in claimed synergies and more efficient network."The bigger question the DOJ is going to look at is, are these efficiencies going to be passed on to the consumers, to the people who buy tickets?" said John Briggs, an antitrust attorney at Axinn, Veltrop & Harkrider.Once the airlines turn in and certify their responses to the second request, the Justice Department has 30 days to approve the deal or file a lawsuit to prevent the transaction.Briggs predicts that the Justice Department will likely wrap up its investigation into the merger sometime this summer, saying complex mergers like the American-US Airways deal usually take around six months.Previous decisionsThe Justice Department hasn't tried to block an airline merger since before the terrorist attacks on Sept. 11, 2001.In 2001, government regulators joined several state attorneys general in an antitrust lawsuit to prevent US Airways and United Airlines from merging. They argued that the combined airline would have a monopoly or duopoly on 30 U.S. routes."They don't like it when the routes go from two airlines to one," Liebowitz said. "It's not like the DOJ can create a new competitor if there is no one else who wants to fly the route."A couple of mergers have passed government scrutiny, including Delta Air Lines' merger with Northwest Airlines in 2008 and Southwest Airlines' purchase of AirTran Airways in 2011.However, United Airlines' deal with Continental Airlines in 2010 gave regulators pause. Before they would approve the merger, the Justice Department required the carriers to give up 18 takeoff and landing slots at Newark's airport. After Southwest agreed to lease the slots from the carriers, the regulators signed off on the deal.The Reagan problemAmerican and US Airways' deal may require a similar divestiture of slots, this time at Reagan National Airport in Washington, D.C. Under the current deal, the combined carrier will have between 65 and 70 percent of the slots at the capital's preferred, close-in airport."Something is going to have to give at Reagan for sure," said Bill Swelbar, an airline researcher at the Massachusetts Institute of Technology.At a Senate committee hearing last month, lawmakers grilled airline executives on what kind of service cuts the merged carrier might make at Reagan if they had to divest slots."We don't believe it would be good for consumers for us to divest any slots," Parker told the Senate committee."If US Airways or the new American were asked to divest slots, we would, by definition, divest those that are the least lucrative to the airline. Those would tend to be service to smaller communities."New York's LaGuardia Airport could also be a concern to government regulators, Swelbar said. Even though Delta has the most slots at that airport, the combined American-US Airways would have over 30 percent of the slots."This is the last big merger, and there are going to be a lot of people who are going to want to reset the architecture at the slot-controlled airports, particularly if small communities who have access to them are hurt if those slots are divested," Swelbar said.Andrea Ahles, 817-390-7631Twitter: @Sky_Talk
Here are routes where American and US Airways both have service.
Sources: American and US Airways
Regulators' previous calls
Here are decisions the Justice Department rendered in previous airline mergers.
Southwest Airlines-AirTran Airways, 2011 -- Approved. Found the merger would not substantially lessen competition.
United Airlines-Continental Airlines, 2010 -- Approved after United Continental agreed to lease 18 landing and takeoff slots at Newark to Southwest Airlines.
Delta Air Lines-Northwest Airlines, 2008 -- Approved. Found the deal would be beneficial to consumers.
US Airways-America West Airlines, 2005 -- Approved. Found little overlap between the networks of the two carriers.
United Airlines-US Airways, 2001 -- Sued to stop the merger. Found it would have given United a monopoly or duopoly on over 30 routes. The deal was never completed.
Source: Justice Department