American Airlines and US Airways reached a deal with the government that lets the two form the world's biggest airline and opens up more room at key U.S. airports for low-cost carriers.The concessions that the government extracted from the two airlines appear to be rather modest - they gave up a few gates at a few larger airports, and agreed to continue service some smaller ones, among other things - but generally speaking, American and US Airways came away unscathed.
The settlement announced Tuesday — if approved by a federal judge — would end a fight with the U.S. Justice Department and head off a courtroom showdown later this month.
J.P. Morgan analyst Jamie Baker said, "Why mince words? A win for the airlines" is how he viewed the settlement.My thoughts on this merger are the same now as they were back in August - basically, I think the flying public is going to be the real loser in all this - but this merger is simply the logical conclusion of a consolidation trend that has gripped the domestic airline industry over the past several years.
The two airlines and some industry experts said the Justice Department had a weak case, especially after allowing four big airline mergers in the past eight years with few conditions. American and US Airways, however, were not willing to bet the fate of their multi-billion-dollar merger on the decision of a single judge.
This settlement will be approved by a federal judge in the coming weeks, and the two airlines will begin the merger process before the year is over.