US Airways, American demand DOJ merger documents

Posted: September 22, 2013

US Airways and American Airlines asked a federal court Friday to make the Justice Department turn over documents on its approval of four previous airline mergers, and to explain why it endorsed those mergers and now seeks to block theirs.

The airlines said they could not defend against the Justice Department lawsuit filed Aug. 13 without seeing the "studies, analyses, and forecasts" the government used in approving the mergers of Delta-Northwest, United-Continental, Southwest-AirTran, and US Airways-America West.

"Over the past eight years, DOJ has approved four airline mergers similar to the one at issue here," the carriers said in a court filing in Washington. "Each time, DOJ issued press releases explaining that, after careful consideration, it had determined that the merger would enhance competition in the airline industry and benefit the traveling public."

US Airways - the dominant airline in Philadelphia - and American say their merger would benefit consumers by creating an airline that could compete with United and Delta, which after their own megamergers have broad airline networks with global reach and enjoy significant size advantages over American and US Airways, according to the court filing.

The Justice Department now alleges that those previous mergers "hurt passengers" and that the American-US Airways combination "would exacerbate the harm caused by the previous mergers," the carriers said.

The Justice Department says its information about the previous mergers is not relevant in the current case. The airlines said they need the records to learn the facts on which the government approved the four mergers.

"Even more remarkable than DOJ's abrupt and unexplained reversal is the fact that it contends that the dramatic change in its view of consolidation in the airline industry is off-limits in the discovery process here," the airlines said.

The Justice Department lawsuit contends the $11 billion merger would reduce competition and lead to higher airfares. The case is scheduled to go to trial Nov. 25.

The companies have said the deal is critical for American, whose parent, AMR Corp., has been operating under Chapter 11 bankruptcy protection since November 2011.

The airlines said they intended to show at trial their merger would "increase, not decrease, competition" and would use "models and economic studies very similar to those that DOJ relied on in approving the prior mergers."


Contact Linda Loyd at 215-854-2831 or lloyd@phillynews.com.

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