Alas, the fact that AMR is so intent on pursuing the merger, confirmation of its plan and the trial suggests that the company and regulators were very wide apart on any discussions involving compromises.
"It is only informed speculation, but it would not surprise me if the [Justice] Department took the position that the combined American-US Air should not hold any more slots than US Air already holds, meaning most of all of the American slots would have to be divested to another carrier or carriers in a manner satisfactory to the department," Braun asserted.
What's likely is that the Reagan slots will be centerstage whether the marriage with US Air goes through or not. According to DOJ, American and US Airways go head-to-head with nonstop service on 17 domestic routes representing about $2 billion in annual industry-wide revenues, and, overall, compete on 1,000 routes. However, the Reagan slots appear to be the ones that AMR can't live without, otherwise it would have cut a deal with regulators. As a result, the slots will be even more valuable for AMR if it's going to go forward as an independent airline.
Written by Pat Holohan
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV