Airline antitrust case needs fair amount of time

Posted Friday, Aug. 30, 2013  comments  Print Reprints

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norman There are plenty of reasons to hope the $14 billion merger of American Airlines and US Airways takes place soon.

What the companies are calling the New American would be the largest airline in the world, and it would be based in Fort Worth.

The merger could finally bring stability to American, which in the 10 years before it declared bankruptcy in November 2011 lost $10 billion.

Already there is labor peace that American has not seen since at least 2003, when unions linked arms with management in an extraordinary effort to forestall bankruptcy. Labor relations fell into deep bitterness not long afterward, destroying the good will of those 2003 agreements.

Now the airline’s unions not only have new contracts, but their members have been given a $2 billion stake in the post-merger New American.

All of that and more is to the good: Go merger!

Still, pushing for a quick trial date for the U.S. Department of Justice antitrust suit against American and US Airways is not on my list of good things.

The DOJ says it intends to prove that the proposed merger “presents a substantial threat to competition in air travel in local markets throughout the United States and will likely result in hundreds of millions of dollars in harm to consumers annually.”

I want to know if that is true.

Justice Department lawyers say they need until March 3 to gather and analyze the detailed evidence they will need to present, depose witnesses, interview experts, file briefs and respond to briefs in what’s sure to be a numbingly complicated case.

I’m not an attorney, but if I were and I faced the kind of legal talent American and US Airways would bring against me, I know I’d want to have my case locked down.

American and US Airways say they want a trial to start Nov. 12. The airline industry is fragile, they say, and any number of economic winds could blow against them as they face powerful competitors.

Instead of the consumer costs cited by the DOJ, the airlines say the merger will have net consumer benefits worth $500 million annually. Every day of delay is a day those benefits won’t be realized.

New contracts carry employee raises and benefit increases worth $400 million a year, but they’ll be delayed if the merger is put off.

I see the pressing nature of the matter. Yet ultimately it is consumers, the people who buy the airline tickets and pay the baggage fees and other costs, whose wallets are on the line.

The airlines point out that other huge mergers in their industry, particularly United-Continental and Delta-Northwest, were not challenged by the Justice Department.

I say that’s not decisive. DOJ is entitled to say it has looked at the way the airline industry is working under these consolidations, doesn’t like what it sees and doesn’t want to add to an anti-competitive problem.

A federal judge in Washington, D.C., has scheduled a conference with the parties on Friday to discuss a trial date. I expect a fair decision.

Mike Norman is editorial director of the Star-Telegram. 817-390-7830 Twitter: @mnorman9

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