Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Hub city mayors, Oklahoma AG express opposition to airline merger challenge, (Oct 23, 2013)

By Tobias J. Gillett, J.D., LL.M.

In a letter sent today to Attorney General Eric Holder, the mayors of seven cities with airline hubs asked the Department of Justice to reconsider its challenge to the proposed $11 billion merger between US Airways Group Inc. and American Airlines’ parent corporation, AMR Corporation. In a related development, Oklahoma Attorney General Scott Pruitt today announced his intent to file an amicus brief supporting the merger with the federal district court in Washington, D.C.

Mayors’ letter. According to the letter—sent by the mayors of Charlotte, Chicago, Dallas, Fort Worth, Philadelphia, Phoenix, and Miami-Dade County—the merger would create a better route network than either airline could provide on its own. The letter contends that the network would result in more passenger traffic to and from Charlotte Douglas International Airport, Philadelphia International Airport, Phoenix Sky Harbor International Airport, Chicago O’Hare International Airport, Dallas/Fort Worth International Airport, and Miami International Airport, thus creating jobs and stimulating the local economies.

Failure to complete the merger would put American and US Airways at a competitive disadvantage to Delta and United, each of which had consummated previous Justice Department-approved mergers, and would place the mayors’ cities “at an unnecessary competitive disadvantage to Atlanta, Newark, and other hubs that directly benefit from the Delta and United mergers.”

The letter notes that both the affected companies and organized labor at the airlines supported the merger and contends that “[s]uch a constructive approach between employees and management should be applauded by the Administration, not challenged.”

“Our cities rely on the airline industry to support existing business, attract new businesses and to keep our local economies moving forward,” the letter concludes. “The health and well-being of our cities and our citizens depends on this combination moving forward.”

Oklahoma AG’s amicus brief. Oklahoma Attorney General Scott Pruitt also announced his intention to file an amicus brief supporting the merger in November.

“The Department of Justice should drop its lawsuit and allow the merger of American Airlines and US Airways to continue,” said Attorney General Pruitt. “This merger will benefit consumers by providing more choices and options, and our amicus filing will make the case that the merger does not violate either state or federal antitrust laws and should move forward.”

Attorney General Pruitt’s announcement follows an October 3 letter to Attorney General Holder, in which Pruitt called on the Department of Justice to permit the merger to proceed.

Companies: AMR Corp.; US Airways Group, Inc.

News: Antitrust AntitrustDivisionNews