This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: An Unscheduled Departure

NEW YORK (The Deal) -- Assumptions can be dangerous. So it is surprising that despite the turbulence facing the potential merger of US Airways Group (LLC) and AMR (AAMRQ), industry pundits and analysts predict so confidently that the Department of Justice will settle its lawsuit seeking to block the $11 billion merger.

Tempe, Ariz.-based US Airways secured a deal with the bankrupt parent of American Airlines in February after more than a year of pushback from AMR management. With initial smooth flying, the deal appeared to be on its way to forming a third truly national U.S. air carrier network. The merger had the backing of labor and quickly won AMR creditor support. But it was thrown into doubt last month when the DOJ went to court to try to block it on antitrust grounds.

Few saw the DOJ action coming, and the weeks since have provided no shortage of twists and turns. But the consensus among an overwhelming majority of industry watchers on what happens next is remarkably clear. In nearly all analyst reports, social media posts, newspaper columns and television appearances, they predict the airlines and the DOJ will settle the case, allowing the deal to eventually proceed.

That consensus among airline industry players, however, contrasts markedly with the opinions of antitrust experts who have represented merging clients before the DOJ and litigated merger cases. They are decidedly more skeptical. These observers contend that while some of the DOJ allegations might lend themselves to a settlement, the core of the DOJ's case -- that the merger would increase the likelihood of coordinated behavior among remaining network airlines, leading to higher fares and fees and reductions in service -- does not suggest an obvious settlement.

For their part, neither the government nor the airlines are saying anything beyond the conventional boilerplate in their court filings that they are willing to consider a settlement if the other side presents the right deal.

"Any discussions about settlement to resolve this litigation, whether internal, with DOJ directly or through the mediator, would be private and we are not going to comment on them in any way," a spokesman for the airlines said.

1 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs