Feds Seek Airline-Merger Trial In March

Aug. 27--It could be more than six months before US Airways and American Airlines get their day in court to try and win approval for their merger, under a trial date proposed by the U.S. Department of Justice on Tuesday.

A federal judge in Washington could decide the trial date as early as Friday. The Justice Department is seeking a March start date for the trial, which would likely take about two weeks.

The airlines are trying to get legal proceedings underway this year and have requested a trial date of Nov. 12.

A trial date next year would prolong uncertainty about the future of Charlotte Douglas International Airport, where US Airways operates about 90 percent of daily flights, and the 7,400 US Airways employees based here. Charlotte Douglas would be the second-busiest hub for the merged airline, after Dallas/Fort Worth, and US Airways CEO Doug Parker has said the airline would add flights in Charlotte.

Most of the unions representing the airlines' employees are lining up to support the merger, which offers them the chance at raises and more career stability. The Charlotte-based US Airline Pilots Association joined four other airline unions in backing the airlines' proposed earlier trial date.

The unions and airlines are working to rally employee support and planning to lobby in Washington in the coming weeks to put political pressure on lawmakers.

The Justice Department sued to block the merger on antitrust grounds earlier this month, surprising airline executives. The combined company would be the largest airline in the world, which the Justice Department said would gut competition and drive up airfares and fees.

American is currently under bankruptcy protection. Executives had planned to get approval to exit bankruptcy and merge with US Airways as early as the end of this month, before the lawsuit.

The Justice Department rebutted the airlines' claims that the lawsuit was a surprise.

"From day one, interested parties knew what should have been clear: that a merger of two large firms competing in already highly concentrated markets might draw an antitrust challenge," the Justice Department wrote. "It was Defendants' desire to pursue a highly problematic merger that created the problem they are now seeking to blame on others."

Now, with American's stay in bankruptcy court prolonged for months at least, the company has argued that it needs a speedy trial to stave off further financial damage.

The Justice Department isn't buying that argument.

"This argument...ignores the fact that American's restructuring efforts have been extraordinarily successful and have positioned the company to compete as a strong and vibrant standalone firm," the Justice Department wrote.

The scheduling hearing is set for 9:30 a.m. Friday, in U.S. District Court Judge Colleen Kollar-Kotelly's courtroom.

Copyright 2013 - The Charlotte Observer

Loading