Justice Department probing American, US Airways merger
American Airlines-US Airways merger needs approval from US Justice Department and Department of Transportation
The US Justice Department is taking depositions as part of a probe into a planned merger of American Airlines and US Airways Group that would create the world’s largest airline, three sources close to the discussions told Reuters.
The sticking point in talks between the Justice Department and the companies is whether the airlines will agree to sell slots, take off and landing rights, to reduce their dominance at Reagan National Airport outside Washington, D.C., according to one source.
The three sources spoke privately to protect business relationships.
US Airways announced on February 14 that it planned to merge with American, which is emerging from bankruptcy, to create an US$11 billion airline. The deal requires the approval of the US Justice Department and the Department of Transportation. The companies hope to wrap up the merger by the end of September.
American Airlines and US Airways declined comment.
The fact that the Justice Department is taking sworn testimony in the form of depositions indicates it has concerns that the proposed merger creates antitrust problems. Depositions will be needed if the agency approves the deal with conditions or, in rare cases, if it decides to try to stop it. The department could also decide to approve the merger without requiring asset sales.
Depositions preserve testimony if the department decides to challenge the merger, said Robert Doyle, an antitrust expert with Doyle, Barlow and Mazard.