Look for a Nov. 25 Settlement in the US Airways/AMR Merger Case

CHARLOTTE, N.C. ( TheStreet) -- Now the attorney general is speaking publicly about settlement terms for a merger between American ( AAMRQ) and US Airways ( LCC) , the best indication yet that this case is headed for a settlement.

It has always seemed likely that the case would be settled on Monday, Nov. 25, the first day of a scheduled trial in U.S. District Court, where Judge Colleen Kollar-Kotelly, signaling her preference for a settlement, scheduled a trial for Thanksgiving week. That would be a deal made at the last minute, as deals often are.

On Monday, Attorney General Eric Holder, speaking at a news conference involving another case, said settlement talks are "ongoing (and) we hope that we will be able to resolve this short of trial.

"What we have tried to focus on is to make sure that any resolution in this case necessarily included divestitures of facilities at key constrained airports throughout the United States," Holder said. "That, for us, is something that has to be a part of -- of any resolution.

"Our concern is making sure that we look at, as we have -- as we do in all cases that the antitrust division brings, to make sure that we bring benefit to consumers. We certainly alleged in the complaint the concerns that we've had. And there are a number of ways, I think, that we can deal with those concerns."

Asked whether he had a magic number of slots that would have to be divested to enable a deal, Holder responded, "Yes, there is, but I won't tell you what it is."

The day before, news of settlement talks was leaked to The Wall Street Journal. This is how these matters are often resolved. People always say they do not want to negotiate in the newspaper. But the truth is that newspapers often provide efficient venues not only for parties to lay out their cases, but also but also for negotiations to take place because the parties can throw out suggestions and gauge the response without formally offering anything.

The Justice Department shocked the airline industry on Aug. 13, when it said it would sue to block the planned merger. But since then nothing has gone the Justice Department's way.

On Aug. 30, Kollar-Kotelly set the trial date, denying the Justice Department's request for a delayed trial, which might have enabled the merger to die on its own. On Sept. 19, labor union leaders and members blitzed Washington in support of a merger.

On Oct. 1, the Texas attorney general backed out of the group of state attorneys general backing the lawsuit, and last week the Florida attorney general hinted that she may back out too. It can be lonely at the top of a lawsuit that fails to gain traction. When you sue airlines, the world is supposed to applaud your willingness to stand up to an unpopular industry, but in this case that did not happen.

Meanwhile, the letters backing the merger were pouring into the White House and the Justice Department from Democratic members of Congress, from chambers of commerce, and from hub city mayors including Rahm Emanual, mayor of Chicago and formerly President Obama's chief of staff.

This is not to say that the Justice Department will negotiate easily. No doubt the airlines have already offered slots at Washington Reagan National, and the Justice Department will want more of those plus something else, perhaps increased access to Chicago O'Hare airport, or perhaps a commitment from someone like Spirit ( SAVE) or Southwest ( LUV) to fly Charlotte-Dallas, perhaps in exchange for some slots elsewhere.

But it's become clear that not a single person in the United States wants a trial. Not the Justice Department or the airlines, all of whom have too much to lose, and not the judge who seems to be raising the possibility that if a trial occurs, the parties might be in the courtroom the day before Thanksgiving and perhaps the day after as well.

Judges tend to be busy people. They always want cases to settle, and they can be very convincing.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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