US Airways, American Reach Settlement with DOJ on Merger Lawsuit

Nov. 12--US Airways and American Airlines have reached a settlement agreement with the Justice Department to let their merger proceed, the airlines said Tuesday.

As part of that agreement, the airlines have agreed to maintain a hub at Charlotte Douglas International Airport for at least three years. The airlines will also maintain their hubs at New York-Kennedy, Los Angeles, Miami, Chicago-O'Hare, Phoenix and Philadelphia. for the same length of time.

The Justice Department sued unexpectedly to block the merger in August, on the grounds it would suppress competition and raise prices. Airline executives had expected to easily win approval for their deal and close in early September.

To gain approval from the Justice Department, the airlines agreed to give up 44 daily flights at Washington Reagan National and 12 daily flights at New York LaGuardia. US Airways and American will also give up two gates and the related support facilities at Boston Logan International Airport, Chicago O'Hare International Airport, Dallas Love Field, Los Angeles International Airport, and Miami International Airport.

No divestitures were required at Charlotte Douglas as part of the deal.

Flight attendant unions at US Airways and American said shortly before noon Tuesday they were reviewing the terms of the deal.

"Flight Attendants at US Airways, through our hard work and sacrifices, helped make this merger possible," said Roger Holmin, president of the Association of Flight Attendants. "When the antitrust lawsuit threatened the opportunity to realize the benefits of the merger, we stood together with other frontline workers and took the case of our colleagues and families directly to lawmakers."

A judge must still approve the settlement agreement. But reaching a settlement with the Justice Department is the final hurdle for the US Airways-American merger. Shareholders have approved the deal, and a federal bankruptcy court judge overseeing American's Chapter 11 case earlier signed off on the plan.

Charlotte Douglas would be the second-busiest hub in the combined airline, second only to Dallas/Fort Worth.

US Airways chief executive Doug Parker is set to lead the combined company, which would be called American Airlines and headquartered in Fort Worth.

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