US Air, American Push Back On Merger Lawsuit
US Airways and American Airlines, whose proposed merger has been stalled by US government opposition, urged a court on Friday to require the Justice Department to turn over documents relating to its approval of four previous airline mergers.
The Justice Department filed a lawsuit on August 13 to stop the planned merger of US Airways and American's parent, AMR, arguing that the deal would lead to higher air fares and other fees. A judge will hear the case without a jury in November and decide whether the deal can go forward. The airlines have said that the merger is needed to help them compete in a rapidly consolidating industry.
In their motion, US Airways and American asked for analyses, studies, forecasts and other documents relating to the Justice Department's approval of the four mergers completed over the past decade.
Delta Air Lines acquired Northwest Airlines in 2008, United merged with Continental in 2010 and Southwest Airlines bought discount rival AirTran in 2011. US Airways bought America West in 2005.
Justice Department spokeswoman Gina Talamona said that the agency would reply formally to the motion next week.
The motion for the material, which could be quite extensive, will likely be granted, said Robert Skitol, an antitrust expert with Drinker Biddle & Reath.
"There's no doubt about it being very burdensome," said Skitol. "This is very resource-intensive."
Previously, the government had said the request was too broad, and that data on previous mergers not relevant to this case.
The airlines and the Justice Department could settle the antitrust lawsuit, which would likely require the companies to sell certain assets. Any divestitures would require approval from the judge overseeing American's emergence from bankruptcy.
The airlines have defended the deal in court filings, saying it would create USD$500 million in savings to consumers annually by building a stronger competitor to Delta and United.
In its complaint, the Justice Department focused on Washington's Reagan National Airport, where the two companies control a combined 69 percent of takeoff and landing slots. It also listed more than 1,000 city pairs where the two airlines dominate the market.