An agreement has been reached between the US Justice Department and and USAirways.  The proposed settlement of anti-trust concerns, which still must be approved by the Federal District Court, includes the divestiture of 104 takeoff and landing slots at Washington DC’s Reagan National Airport, 34 at New York LaGuardia, and to sell 2 gates at five other airports, including Chicago O’Hare, Los Angeles, Miami, Dallas Love Field and Boston.

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This will result in 44 fewer daily departures from Reagan National, where the combined carriers currently operate 290, a 15% drop, and 12 fewer from La Guardia, where they operate 175, a 6.9% drop.

This preliminary settlement eliminates the need for a trial scheduled for later this month, and when approved will clear the way for the combination.    The slots and gates are likely to be made available to low fare carriers, including Southwest and JetBlue, in an effort to stimulate competition and lower fares, although Delta has expressed interest in the Reagan National slots as a carrier most likely to continue to serve smaller markets.

As a part of the agreement, existing hubs must be maintained “consistent with historic levels”  in Charlotte, JFK, LAX, Miami, Chicago, Philadelphia and Phoenix.  This will ensure that the dismantling of hubs in St. Louis, Pittsburgh, Cincinnati and Memphis that occurred previously will not occur with this merger.  The carriers must also maintain service to each of the states that participated in the Federal lawsuit against the merger, including Arizona, Florida, Michigan, Pennsylvania, Tennessee and Virginia.

Essentially, the final hurdle to the merger has finally been cleared, and the management team from America West, which took over USAirways, and now American, is free to manage what will become the largest airline in the world.

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