This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Everyone Declares Victory After US Airways/AMR Merger Approval

CHARLOTTE, N.C. ( TheStreet) -- Now, as expected, nearly everybody can declare victory following the settlement for the merger of US Airways (LCC) and American (AAMRQ).

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.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!
SYM TRADE IT LAST %CHG
LCC $0.00 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%
GOOG $558.40 0.00%
TSLA $203.34 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

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