Antitrust Law Daily Wrap Up, TOP STORY: Dozens of House Dems ask president to allow US Airways/American Airlines merger to proceed, (Oct 16, 2013)

By Jeffrey May, J.D.

Two Democratic congressmen, one from Arizona and the other from Texas, are behind the latest effort to get the administration to approve the proposed $11 billion merger between US Airways Group Inc. and American Airlines’ parent corporation, AMR Corporation.

Rep. Marc Veasey (D-Texas) announced today that he and Rep. Ed Pastor (D-Arizona), along with 66 of their Democratic colleagues, sent a letter to President Barack Obama, expressing their “respectful disagreement with the U.S. Department of Justice’s lawsuit against the proposed merger.” Among the signatories was Rep. Nick Rahall (D-West Virginia), ranking member of the House Committee on Transportation and Infrastructure.

The lawmakers contend that the proposed merger will increase competition. “The combination will make both airlines a much stronger competitor against other airlines like United, Delta, and Southwest that have benefitted from recent mergers as well as a growing number of air carriers like Virgin America, JetBlue, and Spirit,” the October 15 letter states.

Congressman Pastor expressed his hope that the administration would recognize the benefits of the transaction and “settle the lawsuit immediately.” Pastor represents Arizona’s seventh congressional district, which encompasses parts of Phoenix—including Sky Harbor Airport—and Glendale. US Airways is headquartered in nearby Tempe.

Congressman Veasey expressed concerns for employees of the carriers and Dallas Fort Worth Airport who work in his district—the 33rd congressional district of Texas, which includes portions of Fort Worth. AMR’s headquarters are located to Fort Worth.

“With more than 20,000 American Airlines employees in the DFW area alone, I have serious concerns about the Department of Justice’s lawsuit against US Airways and American Airlines which will put the jobs of these hard working Texans and thousands of other Americans at risk,” said Veasey. “I believe this merger is good for our local economy, good for consumers, good for competition and should be approved.”

These House Democrats join a growing list of merger supporters. Oklahoma Attorney General Scott Pruitt sent a letter to the U.S. Attorney General Eric Holder on October 3, expressing support for the merger. Noting that the merger “is vitally important to Oklahoma’s economy,” Pruitt asked that the Justice Department drop the suit.

And just two days prior to the Oklahoma attorney general’s letter, Texas, one of the original plaintiff states in the federal/state challenge to the merger, moved to dismiss its claim based on a settlement with the airlines. In exchange for an agreement by the carriers to continue daily service to certain Texas airports and to maintain the headquarters for their merged entity in the Dallas-Fort Worth metropolitan area, Texas Attorney General Greg Abbott agreed on October 1 to drop its challenge to the airlines’ proposed combination.

In addition to these efforts by elected officials, unions representing pilots, flight attendants, and other transport workers also have called for a speedy resolution of the government’s challenge to the airline merger.

The U.S. Department of Justice Antitrust Division and six states, along with the District of Columbia, filed a complaint to block the merger on August 13 in the federal district court in Washington, D.C. An amended complaint was later filed adding the State of Michigan as a plaintiff. A trial in the matter is set to begin on November 25 (U.S. v. US Airways Group Inc., Case 1:13-cv-01236).

The lawmakers’ letter “cc’d” U.S. Attorney General Eric Holder and U.S. Department of Transportation Secretary Anthony Foxx, as well as the plaintiff states’ attorneys general.

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

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