Should American Air Tout Record Profit as It Seeks a Merger?
He noted that "in the coming days we'll be sharing ways you can get involved to express your support. We're ready to make our case in court for the merger's significant benefits to all of our stakeholders and the communities we serve."
Unions are readying petition drives, although they have been told by attorneys for US Airways and American not to stage demonstrations directly protesting against unpopular Attorney General Eric Holder, sources said.
Asked whether completing its best month in history helps American to make the case for a merger, Ankur Kapoor, an antitrust attorney at Constantine Cannon in New York, responded: "It doesn't.
"After all, the DOJ alleges in its complaint that American is doing great on its own and does not need US Airways," Kapoor said, and the July report underscores that belief.At the same time, Kapoor said, "The bigger issue is long term. Can American and US Airways thrive on their own and in such a way as to challenge United and Delta? That's the real question." Additionally, he said, "It could be that market expectations that a deal will go through are giving American an operational boost, giving consumers confidence that AA is going to be around and be a stronger competitor." In any case, the next major step in the saga comes Thursday, when Bankruptcy Court Judge Sean Lane will conduct a hearing to consider whether he should confirm American's plan of reorganization in advance of a U.S. District Court ruling on whether the merger violates antitrust statutes. In the bankruptcy case, attorneys for US Airways and American will argue in favor of a merger. In other news on Monday, oil prices hit a five-month high of more than $111 a barrel. As Airlines for American economist John Heimlich told reporters last week, it doesn't take much oil price fluctuation to push most carriers from a profit to a loss. The Justice Department could look silly if it prevents a merger only to have a weakened carrier right back in bankruptcy court in a few years, arguing that it is simply too small to continue to operate in a global economy dominated by bigger competitors. By then, those low one-stop fares offered by US Airways in select markets, which DOJ cites in its complaint as the principal reason to stop a merger, could be long gone. Follow @tedreednc -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed
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