The long rumored merger between US Airways and American Airlines appears to ready to become a reality. According to a recent DenverPost.com report, the Justice Department recently announced that it has approved the new marriage between the two airlines. The transaction will make the new airline (likely to be called American Airlines) the world’s largest airline.
One major issue that had to be resolved was how the new airline would make room for discount carriers in the dozens of airports it would operate out of. The proposal would call for both airlines to divest gates and slots to low-cost carriers. This would allow discount carriers such as Spirit Airlines and Sun Country to operate more flights and create the competitive balance that antitrust laws are designed to protect.
For example, Reagan National Airport in Washington, D.C. would be able to accommodate 52 flights from discount carriers, and New York’s LaGuardia would have 17 more flights from such airlines. Additionally, the airline agreed to maintain hubs in Charlotte, Dallas (which will be the main headquarters), Los Angeles, Miami, Phoenix, Philadelphia and Chicago.
We find this story interesting because business mergers are a part of the lifecycle of many different enterprises. When businesses decide to join forces, there are a number of legal issues that must be resolved in addition to the myriad of practical issues. It takes legal minds with strong understanding of anti-trust law and are well-versed in business transactions.
If you are considering the purchase of a business, whether it is to consolidate operations or to start in a new industry, an experienced business law attorney can help.
Source: DenverPost.com, “Justice Department clears $11 billion American-US Airways merger,” Greg Gordon, November 13, 2013
