American Airlines, US Airways merger to go forward

The merged airline will give up dozens of slots at DCA. Photo: Kris Van Cleave

WASHINGTON (WJLA) - The massive merger between American Airlines and US Airways will go forward, the Department of Justice announced Tuesday, after an agreement to settle a series of lawsuits challenging the move.

The merger, the plans for which were announced in February of 2012, is expected to be completed by December.

As part of the agreement, the new combined airline will lead to a reduction in service at Ronald Reagan Washington National Airport. The company says that the merger will lead to 44 fewer daily departures from DCA.

"There is much more work ahead of us, but we're energized by the challenge and look forward to competing vigorously in the ever-changing global marketplace," American Airlines president and CEO Tom Horton said.

The settlement reached Tuesday still requires approval by a federal judge in Washington.

In total, the merged airline will give up 52 slot pairs at Reagan, 17 at New York's LaGuardia Airport and several flights out of and into Boston Logan International Airport, Chicago O'Hare International Airport, Dallas' Love Field, Los Angeles International Airport and Miami International Airport.

Those slots, as per the agreement, would go to low-cost carriers in an attempt to offset the merger's impact.

"This mutual agreement ends a protracted period of ambiguity and provides the platform on which the future network of flights at Ronald Reagan Washington National Airport will be built," Metropolitan Washington Airports Authority officials said in a statement.

The combined airline will maintain hubs in Charlotte, New York (Kennedy), Los Angeles, Chicago (O'Hare), Philadelphia and Phoenix.

The Department of Justice was a party to a lawsuit that took issue with the merger. The agency, along with several states including Virginia and the District, to block the $11 billion merger in August.

Officials with the DOJ and the parties to the suit claimed that travelers and several airports, particularly Reagan, would be hurt by the merger.

Attorney General Eric Holder said the agreement would ensure more competition on nonstop and connecting routes throughout the country. The department called the slot and gate divestitures at key airports "groundbreaking."

The agreement announced Tuesday settled that suit, of which the DOJ, Arizona, Florida, Michigan, Tennessee, Pennsylvania, Virginia and the District of Columbia.

"We are pleased to have this lawsuit behind us and look forward to building the new American Airlines together," US Airways CEO Doug Parker said in a statement. Parker will be the new CEO of the combined airline.

The American/US Airways merger is the latest in a line of major airline combinations that have taken place over the past several years.

In 2008, Northwest merged with Delta to become what was called, at the time, the world's largest airline by passenger traffic. In 2010, Southwest acquired AirTran, and in 2012, United completed its merger with Continental.

US Airways itself is the product of a merger; in 2005, the airline combined with America West Airlines.