American, US Airways merger gets green signal

The merger is central to American's effort to emerge from a two-year bankruptcy process.

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US Airways Group Inc and American Airlines will give low-cost competitors more access to a half dozen key US airports, including New York and Washington, D.C., in exchange for permission to merge and create the world's largest airline.

The agreement announced on Tuesday settles a government lawsuit filed in August that argued that US Airways and AMR Corp, parent of bankrupt American Airlines, should be forced to scrap the merger because it would hinder competition and lead to higher fares.

Shares of AMR soared more than 25 percent on the compromise. The merger is central to American's effort to emerge from a two-year bankruptcy process.

The two airlines will divest some of their takeoff and landing slots at Reagan National Airport, just outside Washington, DS, and at New York's LaGuardia Airport, both busy airports with limited capacity.

At Reagan, the airlines will shed 52 pairs of takeoff and landing slots of nearly 300 total held by the two carriers, a move that affects 44 daily departures, said AMR spokesman Casey Norton said.

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