Everyone Declares Victory After US Airways/AMR Merger Approval
Arguably, it's legitimate. The Justice Department got more than it started with, the airlines got the merger they needed, the labor unions were rewarded for their lobbying and even some consumer advocates said they weren't displeased.
On a media conference call, a reporter suggested to Assistant Attorney General Bill Baer of the Department of Justice's Antitrust Division that he didn't get much more than the airlines had originally offered. "You're dead wrong," Baer responded. "There was nothing close to this that was ever on the table until recently. There just was not."
On a subsequent conference call, American CEO Tom Horton was asked whether the carriers recently made substantial movement in negotiations. "I don't think the settlement is terribly different from what I would have anticipated early on," Horton responded. "I think it's a reasonable settlement. It allows us to go build the world's best global network."Asked about the toughest concession in the settlement package, US Airways CEO Doug Parker said "the most painful is the slots at Reagan." Horton agreed, but said the Reagan divestiture "represents about 15% of the combined slots between American and US Airways, so even after divestiture, the new American will have more slots at Reagan than US Airways did prior to the merger." Baer, meanwhile, noted that the divestiture package in total, which also included 19 slots at New York LaGuardia and gates at five other airports, was "the largest ever in an airline merger." American's three principal labor unions applauded the merger, as did the US Airways flight attendants union. Gary Hummel, president of the US Airways pilot union, wrote in a letter to pilots that "the overall synergies of the combined airline will be good for the employees and flying public." As for consumer groups, Business Travel Coalition Chairman Kevin Mitchell said "the remedies that were agreed upon were extensive. "What's more, in its settlement, Justice recognized the reduced influence of Southwest Airlines (LUV) in keeping fares affordable, and opened up airports and facilities to encourage low-cost airline entry," Mitchell said.
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