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ATW Editor's Blog

AA/US Air lawsuit hearing date: Chalk one up to the airlines


Today’s decision by the US District Court judge who will try the Department of Justice versus American Airlines/US Airways antitrust lawsuit case to hold the hearing sooner rather than later is a coup for the airlines, even though they seemed not to have expected a legal fight with DOJ.

American and US Airways were pushing for a November date, arguing that their business plans – and American’s Chapter 11 bankruptcy exit – are put in limbo until the DOJ’s legal challenge can be settled.

DOJ was pushing back, seeking a March 2014 date. Why is not clear. DOJ knew it was going to challenge the merger, so as Hamlin Transportation Consulting president (and ATW columnist) George Hamlin correctly points out, DOJ had the advantage of surprise. DOJ therefore presumably had much of its case worked out and believes it has a strong case. So why delay?

Judge Colleen Kollar-Kotelly, who will try the case, agreed with the airlines, saying that a March date was too far off. “It needs to be a tighter, expedited schedule," she said.

BakerHostsetler antitrust partner Jonathan Lewis, who attended the court hearing, said the Nov. 25 trial date was “certainly good news for the airlines in terms of wrapping things up before the December 13 merger termination date and eliminating some uncertainty.” 

Lewis said the airlines “made a big deal about how good this deal is for corporate accounts, because the combined airline supposedly would be able to compete for those accounts more effectively against United and Delta.  The airlines even said that the court would hear from customers at trial on that.  That, of course, says nothing about how the deal would affect the rest of us.”

And he added, “for its part, the government seemed really interested in American as a standalone airline emerging from bankruptcy versus what the combined airline would look like and do post-merger.  That’s where the government is going to focus its discovery of American.”

American CEO Tom Horton and US Airways CEO Doug Parker, meanwhile, welcomed the November date decision and are talking fighting talk. “We are more committed than ever to bringing our airlines together and look forward to making our case for the new American in court,” they said in a statement to employees that was released to the media. 

Today’s decision was a battle win chalked up to the airlines; the war proper will play out beginning Nov. 25.

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