American, US Airways seek November court date in antitrust suit

Posted Wednesday, Aug. 28, 2013  comments  Print Reprints
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American Airlines’ parent company, AMR Corp., and US Airways have asked for a Nov. 12 trial date in the Justice Department’s antitrust lawsuit against their proposed merger, three months earlier than the government wants.

The companies said they expect the trial to take 10 days, according to a filing Thursday in the Washington, D.C., court of U.S. District Judge Colleen Kollar-Kotelly, who will hear the case.

AMR Chief Executive Tom Horton said he believes that a November trial date provides enough time for attorneys on all sides to prepare for the case.

“The request for a November trial date also reflects our strong, unwavering belief in our merger with US Airways and in our legal case,” Horton said in a letter to the Fort Worth-based company’s employees Thursday. “Simply put: We’re ready to go. It’s time to remove the uncertainty for our customers, people and owners, and achieve our vision for the new American.”

The Justice Department did not ask the court to set a trial date in its Aug. 13 antitrust suit, which seeks to stop the merger. But Thursday’s filing by AMR and US Airways said government attorneys seek to delay the trial until Feb. 10.

The agency did not return calls seeking comment.

Also Thursday, six labor unions representing employees at both airlines issued a joint statement urging Kollar-Kotelly to set a November trial date.

“For American and its employees, the uncertainty of the last two years in bankruptcy has already exacted a heavy toll,” the statement said. “In order to make new American competitive, that uncertainty should be ended as soon as possible.”

In their court filing, the airlines argue that the government cannot justify a slow trial schedule, given that it has had more than 16 months to investigate the merger. The lawsuit says the merger would lessen competition in the industry and lead consumers to pay higher airfares and fees.

Other antitrust cases brought by the Justice Department since 2001 averaged 70 days before a trial commenced, the filing argues. The Feb. 10 date would give government attorneys 180 days to prepare for a trial.

American said its bankruptcy proceedings give urgency to resolving the antitrust case, since the merger is the centerpiece of the company’s Chapter 11 reorganization. The carrier says it is incurring $500,000 a day in bankruptcy-related professional fees.

Also in their filing, the airlines noted that if the judge sets a later trial date, either airline could walk away from the merger. The filing noted that the airlines’ agreement gives either carrier the right to terminate the merger as of Dec. 13 if all regulatory hurdles have not been cleared.

“The fact that the merging parties will have the right to terminate the transaction at any time after that date if there has been no decision from this Court will necessarily introduce even greater uncertainty for the airlines’ employees and customers if Plaintiffs’ alternative proposal for a later trial date is accepted,” the filing said.

Last week, U.S. Bankruptcy Judge Sean Lane delayed his decision on whether to confirm AMR’s reorganization plan, which has been approved by a majority of the carrier’s creditors.

He asked American and other interested parties to submit written briefs by today on why he should rule on the plan before the outcome of the antitrust suit.

In a separate statement, US Airways Chief Executive Doug Parker said his airline is committed to seeing the merger go through and has been encouraged by employees at both carriers, who have told him to “go get ’em.”

“We are eager to get to court so that we can make our case and explain exactly how this merger enhances competition across the US and the globe, and begin creating the new American Airlines as soon as possible,” Parker said in a letter Thursday to US Airways employees.

Parker, who would become chief executive of the combined company, noted that Kollar-Kotelly will ultimately decide the trial date.

In a related development, Rep. Kay Granger, R-Fort Worth, issued a statement Thursday that she was “surprised and disappointed” by Texas Attorney General Greg Abbott’s decision to join the antitrust suit. Five other states and the District of Columbia are also parties to the suit.

“Having followed the merger for months, I believe it would protect thousands of jobs and be good for Fort Worth-based American Airlines and for Dallas/Fort Worth International Airport,” Granger said.

Andrea Ahles, 817-390-7631 Twitter: @Sky_Talk

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