Yahoo Finance American Airlines And US Airways Deal Cleared
A federal bankruptcy judge has cleared the way for American Airlines and US Airways to complete their merger and create the world's largest airline.
The judge has ruled that this month's settlement of an antitrust lawsuit filed by the federal government did not upset American Airlines' bankruptcy reorganisation plan, which is built around the merger.
He rejected a request by a group of consumers to block the deal temporarily.
American Airlines said immediately after the ruling that it plans to complete the deal on December 9.
The Justice Department had sued to block the deal in August, saying that it would hurt competition and lead to higher prices.
Regulators settled their case in exchange for the airlines' promise to surrender some coveted landing rights at Reagan National near the US capital, LaGuardia in New York and some gates at five other airports.
Together, American Airlines and US Airways will be slightly larger in passenger traffic than United Airlines and Delta Air Lines (NYSE: DAL - news) , currently the world's biggest carriers after recent mergers of their own.
District Court Judge Sean Lane in New York had approved the merge-and-emerge-from-bankruptcy plan of American parent AMR Corporation (Other OTC: AAMRQ - news) back in September, but said it was on condition that the company won or settled the lawsuit filed by the government.
AMR (Berlin: ACP.BE - news) filed for bankruptcy protection in November 2011 after losing billions in the previous decade. Almost immediately, US Airways began pursuing a merger.
AMR management was initially reluctant, but the two sides announced a deal in February 2013.
The new company will be called American Airlines Group and will be based in Fort Worth, Texas.
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