U.S. wants AA, US Airways to divest for merger

Nov. 4, 2013 at 2:30 AM
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WASHINGTON, Nov. 4 (UPI) -- Washington will press American Airlines and US Airways to give up airport rights and other assets to get their merger OKd, The Wall Street Journal reported.

The airlines are already planning to propose they would give up landing and takeoff slots at Reagan Washington National Airport, where US Airways is the dominant carrier, and divest assets at other airports, the newspaper said, citing a person familiar with the negotiations, who spoke Sunday.

A slot is a right to schedule a landing or departure during a specific time period.

The newspaper didn't say what other airports American parent AMR Corp. and US Airways parent US Airways Group Inc. would propose.

The Justice Department's antitrust division has sued to block the merger, arguing the deal would hurt consumers by reducing air service and increasing fares.

The lawsuit says the proposed merger would leave the United States with four airlines controlling more than 80 percent of the domestic market. It lists more than 1,000 routes where regulators believe competition would suffer.

AMR and US Airways argue the merger -- which would make the combined company the largest airline in the world by traffic -- would provide a wider variety of choices and a bigger route network to air travelers.

Assets besides slots that may be part of a deal include airport gates and rights to fly to some international destinations, the newspaper suggested.

Slots are limited at LaGuardia and Kennedy International airports in New York and gates are limited at Chicago O'Hare and Los Angeles International airports, the Journal said.

US Airways recently got permission to fly to and from Sao Paulo, Brazil.

If a deal can't be worked out, both sides have said they are prepared to go to trial Nov. 25.

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