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American Airlines merger with US Airways Group Inc has been settled

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November 12
5:02 PM 2013

Both American Airlines and the US Airways Group Inc had finalized an agreement with the US Department of Justice over the settlement of the antitrust suit blocking the merger of the two airlines. This settlement would clear the way for the creation of the world's largest air carrier.

One of the conditions of the settlement would be the new airline giving up 104 flight spots located at the Washington Ronald Reagan National Airport and another 34 at the La Guardia Airport in New York. There would be other divestments made at smaller airports under the proposed settlement filed with the Justice Department's antitrust division in federal court in Washington.

The accord would put the carriers on a schedule to complete the merger by December. Another effect of the merger would be to remove AMR Corp from bankruptcy. According to US Attorney General Eric Holder, the settlement would create 'a bigger foothold for low cost carriers' but also help the merging airlines realize their objective of generating USD1 billion worth of savings. New revenue streams would also remain intact.

In response, US Airways Chief Executive Officer Dough Parker said in an interview today, "DOJ saw they were going through that their case wasn't nearly as strong as they though it was when they filed the complaint." As a result of the merger, Parker would become the CEO of the carrier while AMR's Tom Horton would leave his post. The new airline would retain the American's name and also keep their Fort Worth headquarters. 

The Justice Department's Antitrust Division said, through a call with reporters, said, "This settlement improves on a problematic status quo. It provides more competition than exists today in this industry and that is obviously good news for consumers all across the country who stand to benefit from more choice and more competitive airfares."

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