Attorney seeks temporary restraining order to halt airline merger
11/21/2013 6:32 PM
11/21/2013 6:34 PM
One of the last obstacles remaining for the merger of Fort Worth-based American Airlines and US Airways is a lawsuit filed by a plaintiffs attorney who has unsuccessfully tried to block other airline mergers.
On Thursday, that attorney, Joseph Alioto of San Francisco, was the only party to meet a court deadline to object to the antitrust settlement forged between the airlines and the U.S. government. He formally asked the bankruptcy court for a temporary restraining order to block the deal while his litigation proceeds.
Alioto and thirty-eight plaintiffs, including four Texas residents, filed a consumer antitrust lawsuit in July, arguing that the merger would be anti-competitive and allow 80 percent of air travel to be dominated by three carriers.
“The proposed merger will create undue concentration in the airline industry in the United States and may result in increases in fares, reduction of capacity and availability of flights, reduced services, charges for amenities, loss of jobs, elimination of consumer choice, and other anti-competitive practices and effects similar to those that followed the mergers of Delta and Northwest in 2008, United and Continental in 2010, and Southwest and AirTran in 2011,” the filing said.
Alioto said he wants to discuss his request at a bankruptcy hearing scheduled for Monday, where U.S. Bankruptcy Judge Sean Lane will consider approving the settlement between the Justice Department and the airlines. The deal calls for American and US Airways to give up slots and flights at several major airports including Reagan National in Washington, D.C., and LaGuardia in New York.
If Lane approves the deal, it would allow American’s parent company, AMR Corp., to emerge from bankruptcy and merge with US Airways, likely by mid-December.
Alioto, who has filed antitrust suits to try to stop other airline mergers in the past, argued that the settlement does not alleviate antitrust concerns.
“The DOJ settlement is cosmetic, as debtors readily admitted. The debtors will not suffer any significant divestiture of assets, nor significant change of their business operations,” the filing said.
None of AMR’s creditors filed any opposition to the settlement, although American’s unions filed a brief in support of it.
“The employees of American have sacrificed much to permit this reorganization and should not have to wait longer before their airline can compete with a network equal to others,” the filing said, encouraging the judge to approve the agreement.
American has not yet filed a response to Alioto’s objection to the settlement. It has until 6 p.m. on Saturday to do so.
Separately, American received its first Airbus A321 that has three classes of seats and will be used on transcontinental flights. It will be replacing aging Boeing 767 aircraft on those routes.
“With fully lie-flat seats in the premium cabins, new menu options, and enhanced amenities, the A321T aircraft allows us to provide our customers with amenities that, until now, have traditionally been reserved for those traveling internationally,” said American chief commercial officer Virasb Vahidi in a statement.
American will be the first airline to offer lie-flat seats in first and business class on its transcontinental flights. The carrier said it will begin operating the A321 on its New York JFK-Los Angeles route in January. Starting in March, American will also use the A321 on its New York JFK-San Francisco route.
There will be 102 seats, with 10 in first class, 20 in business class and 72 in the main cabin.
With its new aircraft, American hopes to appeal to corporate business travelers with its first- and business-class seats and Main Cabin Extra seating that has six extra inches of legroom in coach. The planes also feature in-seat entertainment, power outlets and USB jacks at every seat.
The transcontinental routes have seen increased competition in the past few years with Virgin America and JetBlue entering the market. JetBlue, which has also purchased A321s, will offer minibusiness suites on its aircraft on the transcontinental routes next year.
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