The complaint stated that DOJ’s goal was “a full-stop injunction.”.
An investigation is conducted by the career DOJ staff of lawyers and economists, under the supervision of the Antitrust Division “front office” political appointees, who make the final decision on whether to allow or challenge a merger. State attorneys general sometimes conduct parallel investigations that are coordinated with DOJ’s. Neither DOJ nor FTC has the authority on their own to block a merger, but must seek a federal court injunction and prove the combination may “substantially lessen competition.”
Although each of the airlines had approached the deal with a slightly different business rationale, they had a single view of how the merger benefited consumers – by creating an airline with an improved network that could provide passengers with a strong alternative to United and Delta and compete against low-cost carriers. Acknowledging various business approaches is credible, but presenting a single antitrust argument is essential.
Under the HSR Act, parties to a proposed merger must delay closing for 30 days after filing an HSR notification, and if DOJ makes a “second request” for documents and information with which to make an in-depth investigation, then delay until they have responded to that extensive discovery request plus another 30 days.
The airlines requested a quick trial date; as the merger was the plan for exiting bankruptcy, any delay would only prolong AMR’s stay in Chapter 11.
Along with JetBlue, Virgin America and others, the LCCs have 40% of the U.S. domestic market. These nimble rivals keep the network carriers on their game, and newer ultra-low-cost airlines like Spirit and Allegiant are taking share from everyone. Like any lawsuit, here there was a contrast between visions.
Where DOJ saw less competition, American and US Airways saw more. These airlines overlapped on only 17 nonstop routes. Prior airline mergers, which DOJ had allowed, had produced stronger airlines better able to serve passengers. United/Continental and Delta/Northwest had combined to create networks with much greater reach, giving them the ability to provide service to more airports with more frequent flights and improved schedules, features that especially business passengers demand.
DALLAS The president of the AFL-CIO is worried that the merger of American Airlines and US Airways will trigger a costly fight between two unions over representation of airline ground workers.
In a letter to TWU President James C. Little and IAM president Thomas Buffenbarger, Trumka said he feared that the two unions would wind up in "lengthy, contentious and bitter campaigns" to keep representing workers that each has held for decades.