American, US Airways to seek extension of merger deadline

Posted Wednesday, Sep. 11, 2013  comments  Print Reprints

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American Airlines and US Airways will seek to extend their merger agreement beyond its mid-December expiration date, said three people familiar with the situation.

Each airline’s CEO has promised to ask his board of directors to approve extending the date when the merger agreement would dissolve without regulatory approval, the sources told The Associated Press. The extension was first reported Wednesday by The Wall Street Journal.

An extension could be significant because a trial on the Justice Department’s lawsuit against the merger is scheduled to begin Nov. 25, and there might not be a decision until after the Dec. 17 deadline. The airlines are eager to show the Justice Department that the merger won’t die just because the lawsuit has delayed it, two of the sources said.

The people spoke on the condition of anonymity because the plan to extend the merger agreement came up during private discussions among Doug Parker, the US Airways CEO; Tom Horton, the CEO of American parent AMR Corp.; and AMR’s bankruptcy creditors.

Separately Wednesday, the chief executive of JetBlue Airways said American should have to cede the equivalent of all its flights at Washington’s Reagan National Airport if the merger goes forward.

US Airways has 55 percent of flights at the airport, and no carrier should be allowed to exceed that figure, Dave Barger said in an interview with Bloomberg News.

“That should be the ceiling,” Barger said. “We feel very strongly.”

The government contends in its lawsuit that the merger would be anti-competitive, saying a combined carrier would control 69 percent of flights at the airport, where capacity is restricted by U.S. regulators.

US Airways and American executives have said there is enough competition in the region because travelers can use two other airports.

At a bankruptcy hearing today in New York, the judge may approve American’s reorganization plan, which includes the merger.

This report includes material from The Associated Press and Bloomberg News.

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