American Airlines and US Airways has just released a Press Release announced that the airlines have settled the litigation brought by the U.S. Department of Justice (DOJ), et al, challenging the merger of AMR and US Airways (the parent companies). The companies also announced an agreement with the U.S. Department of Transportation (DOT) related to small community service from Washington Reagan National Airport (DCA).

Here is a summary of some of the settlement results:

  • AA and USAirways will lose 52 slot pairs at Washington Reagan National Airport (DCA) and 17 slot pairs at New York LaGuardia Airport (LGA), as well as certain gates and related facilities to support service at those airports, with each slot pair entitling the holder to one departure and arrival. (The term “slot” refers to an airline’s allowance for a single takeoff or landing; hence a “slot pair” allows a round-trip flight, e.g. an airline with 30 slots may operate 15 round-trip flights a day. Such “slot controlling” is found at DCA, ERW, JFK and LGA.)
  • The airlines lose 2 gates at each of the following airports after the completion of the merger:
    • BOS – Boston Logan International Airport
    • ORD – Chicago O’Hare International Airport
    • DAL – Dallas Love Field
    • LAX – Los Angeles International Airport
    • MIA – Miami International Airport
  • The #newAmerican combined company is expected to operate:
    • 44 fewer daily departures at DCA
    • 12 fewer daily departures at LGA
    • Regardless of these reductions, the #newAmerican company states it will “not [be] expected to impact total employment at the new American.”
  • The #newAmerican will maintain hubs in:
    • CLT – Charlotte
    • JFK – New York (Kennedy)
    • LAX – Los Angeles
    • MIA – Miami
    • ORD – Chicago (O’Hare)
    • PHL – Philadelphia
    • PHX – Phoenix
    • (Though not expressly mentioned, I assume for now that hubs will remain at DCA and DFW).
  • The #newAmerican will continue to provide daily scheduled service from one or more of its hubs to each of the following states for at least 5 years:
    • Arizona
    • Florida
    • Michigan
    • Tennessee
    • Pennsylvania
    • Virginia
    • Texas
    • District of Columbia

Next?
Completion of the merger remains subject to the approval of the settlements by the U.S. Bankruptcy Court, and certain other conditions. The companies now expect to complete the merger in December 2013.

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