As the clock ticks towards the federal bankruptcy judge’s review of American Airlines and parent AMR Corporation’s reorganization plan scheduled for August 15, 2013, barriers continue to pop up as to the merger of AA & US Airways, which is part of the proposed plan:
- At last count, 19 states have joined in the U.S. DOJ’s review of the proposed AA-US Airways merger for antitrust issues. The joining of states, through their respective attorney general offices, is common to have a stake in the review process, meetings, testimony, and so forth to safeguard the interests of related air travel, employment, etc. in their states. States include: Arkansas, Arizona, California, Washington DC, Florida, Iowa, Illinois, Minnesota, Mississippi, Nebraska, New York, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Wisconsin and West Virginia.
- A new lawsuit is reportedly expected to be filed in Federal District Court in San Francisco today to stop the merger. San Francisco attorney Joseph Alioto alleges, according to reports, that the merger would harm consumers by “charging higher airfares,” “reducing the number of flights and aircraft,” “eliminating air service to smaller cities,” “eliminating or curtailing hubs,” “reducing the quality of service” and “charging fees for things that were free.”
Regardless of the source of these barriers and others, the fears, justified or not, seem to be painted with a broad brush of consumer protections, including issues of:
- Lost Hubs? — The (new) world’s largest airline may consolidate, thus making cuts in smaller markets. US Airways has hubs in Philadelphia, Charlotte, DC and Phoenix. AA has hubs in DFW, NY, Miami, Chicago and LA.
- Sell Slots? — Whether the airlines will agree to sell slots – takeoff and landing rights – to reduce their dominance (read: antitrust problem) at Reagan National Airport (DCA) outside DC.
- Lost Service? — Reduced or eliminated service to smaller cities? Resulting higher fees and costs?