U.S. seeks March trial date for American-US Airways case

Posted Tuesday, Aug. 27, 2013  comments  Print Reprints

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Government lawyers say they need at least 180 days to prepare their antitrust case against the proposed merger between American Airlines and US Airways, opposing the airlines’ call for a trial this fall.

In a filing made in federal court on Tuesday, the U.S. Department of Justice asked the judge to deny the airlines’ request for a November trial date and rather set it for March 3, 2014.

A conference on the matter with U.S. District Judge Colleen Kollar-Kotelly is set for Friday in Washington, D.C.

The filing says the government needs time to gather evidence and experts to support its case that the combination would harm consumers with higher fares and reduced service.

“Both American and US Airways are reporting record earnings and American is set (absent the merger) to embark on a period of pro-competitive expansion,” the filing said. “Given what is at stake, this Court should allow both sides a full opportunity to develop the relevant evidence in discovery and to present that evidence at trial.”

Justice Department attorneys argued that American’s bankruptcy proceedings do not justify a shortened trial schedule even if the carrier will incur significant costs. The DOJ disputed American’s argument that a delayed emergence from bankruptcy may mean a weaker airline.

“This argument, however, ignores the fact that American’s restructuring efforts have been extraordinarily successful and have positioned the company to compete as a strong and vibrant stand-alone firm,” the filing said.

In a joint statement, American and US Airways called the Justice Department’s request for a March 2014 trial date “entirely unreasonable.” Last week, the carriers asked the court to schedule the trial for Nov. 12.

“The DOJ has been investigating this merger for over 16 months, which is already twice as long as its typical review,” the carriers said. “American Airlines and US Airways are asking the Court to let us compete together in order to offer consumers a stronger alternative to Delta, United, Southwest and others.”

Airline industry analyst Bob Herbst called the DOJ’s request for 180 days to gather evidence for the trial ridiculous.

“It’s simply incredulous that the DOJ has had all of this time to do all of this research to file the complaint and are now saying they need all this time,” said Herbst, founder of AirlineFinancials.com.

Even if the anti-trust suit is delayed until the spring, Herbst said he still expects the merger to occur. For both airlines to compete long-term against United Airlines and Delta Air Lines, a merger is necessary, he said.

Separately, a government report released Thursday showed how many jobs have been cut at American Airlines in the past year.

In June, American’s workforce declined 8.5 percent to 62,591 full-time and part-time employees compared to the same month last year. According to the Bureau of Transportation Statistics, the industry as a whole had 381,441 workers, down 2.4 percent from June 2012.

Delta Air Lines and United Airlines also reduced their workforces, by 3.9 percent and 0.1 percent respectively, while US Airways grew its employee number by 2.1 percent and Alaska Airlines added workers, up 3.7 percent.

AMR Corp.’s regional carrier American Eagle appears to be on a hiring spree, having increased its workforce by 16.6 percent to 12,601 employees. However, other regional carriers are shedding workers.

“Network carriers have responded to increased fuel costs by reducing contracts with the regional airlines that operate less fuel-efficient regional jets. Regional airline employment is down 4.4 percent year-to-year,” the BTS said.

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

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