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USA320Pilot
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PilotAction Merger News for US Airways & American Airlines: November 4, 2013
[SIZE=10pt]Justice Department details deal for American, US Airways fight[/SIZE]
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[SIZE=10pt]AMR [/SIZE]shares spike up 24.5 percent
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[SIZE=10pt]US Airways stock reaches highest level in nearly 6 years[/SIZE]
[SIZE=10pt]Holder said that talks with the companies were ongoing and he hoped for an agreement before the trial is due to start.[/SIZE] There were a "number of ways" to address the government's concerns, he said. Experts said it is unusual for an attorney general to comment at length in the middle of antitrust battle.
See Story: http://finance.yahoo.com/news/u-justice-dept-hopes-settle-170807721.html
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[SIZE=10pt]US air merger prospects brighten[/SIZE]
[SIZE=10pt]See Story: http://www.ft.com/cms/s/0/13d495fc-4588-11e3-b98b-00144feabdc0.html#axzz2jjS0FCuE[/SIZE]
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[SIZE=10pt]American Airlines offered a terse response to Holder's comments[/SIZE]
[SIZE=10pt]"Any discussions about settlement to resolve this litigation, whether internal, with DOJ directly or through the mediator would be private and we are not going to comment on them in any way," said Mike Trevino, a spokesman for the airline. US Airways said it would not comment on the discussions either.[/SIZE]
[SIZE=10pt]See Story: http://finance.yahoo.com/news/holder-airlines-must-concessions-merge-211208316.html[/SIZE]
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[SIZE=10pt]Attorney General Holder says American, US Airways must make broad concessions before merging[/SIZE]
[SIZE=10pt]American Airlines offered a terse response to Holder's comments. "Any discussions about settlement to resolve this litigation, whether internal, with DOJ directly or through the mediator would be private and we are not going to comment on them in any way," said Mike Trevino, a spokesman for the airline. US Airways said it would not comment on the discussions either.[/SIZE]
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[SIZE=10pt]Vicki Bryan, an analyst at the bond-research firm Gimme Credit, said that far-reaching demands by the Justice Department were "disturbing but not surprising." She said the government would push hard for a settlement "to save face" but would find it hard to convince a judge to block the merger. She said holding up the merger would hurt the airline industry by leaving American to carry on "as a below-average, poorly run carrier with a long history of safety concerns."[/SIZE]
[SIZE=10pt]See Story: http://finance.yahoo.com/news/holder-airlines-must-concessions-merge-211208316.html[/SIZE]
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AMR-US Airways Merger: Attorney General Hopes to Resolve Dispute Without a Trial
WASHINGTON WSJ.com) - Attorney General Eric Holder on Monday said the government is willing to settle its antitrust lawsuit against the merger of AMR Corp. and US Airways Group Inc. if the airlines agree to broad concessions that would preserve competition.
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[SIZE=10pt]"What we have tried to focus on is to make sure that any resolution in this case necessarily includes divestitures of facilities at key, constrained airports throughout the United States," Mr. Holder said Monday.[/SIZE]
[SIZE=10pt]Settlement conversations with the airlines "are ongoing, and we hope that we will be able to resolve this short of trial," he said at a news conference announcing an unrelated settlement in the pharmaceutical industry.[/SIZE]
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[SIZE=10pt]If the airlines don't meet the government's demands, the Justice Department is prepared to proceed with the trial, Mr. Holder said.[/SIZE]
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[SIZE=10pt]The Wall Street Journal reported Sunday that settlement talks [/SIZE]were under way, with the department insisting on a broad package of divestitures. The airlines were preparing an offer that included concessions at multiple airports.
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[SIZE=10pt]The attorney general's comments were the latest signal that the parties may be able to reach a deal before the trial, which is set to begin Nov. 25.[/SIZE]
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[SIZE=10pt]Mr. Holder said there were "a number of ways" that the government's concerns could be addressed but declined to provide details.[/SIZE]
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[SIZE=10pt]Some of the busiest U.S. airports have limited room for competitors to expand, either because takeoff and landing slots are limited or because there aren't enough gates.[/SIZE]
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[SIZE=10pt]Asked if there was a magic number of slots the Justice Department would want sold in any settlement, Mr. Holder responded, "Yes there is, but I won't tell you what it is."[/SIZE]
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[SIZE=10pt]US Airways declined to comment. AMR, the parent of American Airlines, said it remains open to a settlement and declined to comment further.[/SIZE]
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[SIZE=10pt]The Justice Department filed suit[/SIZE] against the merger in August, saying the deal would lead to higher fares and fees as well as fewer travel choices in an industry that already had consolidated to a great degree.
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[SIZE=10pt]The lawsuit made several arguments against the deal. As one example, the government said the deal would reduce competition at Reagan National Airport near Washington, where the combined airline would control about two-thirds of departing flights.[/SIZE]
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[SIZE=10pt]The airlines have said that their deal is good for competition because combining forces would allow them to reduce costs and offer better services, such as a more-comprehensive route network that can compete with Delta Airlines and United Continental Holdings.[/SIZE]
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[SIZE=10pt]Attorney General Eric Holder: We are in ‘ongoing’ settlement talks with airlines[/SIZE]
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[SIZE=10pt]The court document was updated today to show that the parties had a 3 p.m. teleconference with the judge in the case[/SIZE]
[SIZE=10pt]See Story: http://aviationblog.dallasnews.com/2013/11/attorney-general-eric-holder-we-are-in-ongoing-settlement-talks-with-airlines.html/[/SIZE]
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[SIZE=10pt]Holder: American, US Airways must shed slots at multiple airports[/SIZE]
[SIZE=10pt]Vicki Bryan, an analyst with Gimme Credit, told investors she expected the DOJ to push for multiple slot divestitures as part of the settlement talks. It’s likely the DOJ wants the airlines to give up slots at not only at Reagan National but also New York’s LaGuardia Airport. “We continue to expect this dispute to be resolved via negotiated settlement, potentially before the trial even starts but no later than year-end, paving the way for the merger to close immediately thereafter,” Bryan said in a research note sent to investors Monday.[/SIZE]
[SIZE=10pt]See Story: http://www.star-telegram.com/2013/11/04/5305746/holder-american-us-airways-must.html?rh=1[/SIZE]
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[SIZE=10pt]U.S. in Talks to Settle Suit Over American-US Airways Merger[/SIZE]
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[SIZE=10pt]Several legal and airline specialists said that despite that talk, the Justice Department’s case was relatively weak and that it now appeared to be narrowing its main concerns about competition to a few airports.[/SIZE]
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[SIZE=10pt]Robert A. McTamaney, a mergers and acquisitions lawyer at Carter Ledyard & Millburn in New York, said Mr. Holder seemed to be “holding out something of an olive branch.”[/SIZE]
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[SIZE=10pt]“Justice will be unable to convince a judge the merger is anticompetitive, especially given that AMR and US Airways offer far less competitive overlap versus all three previous mergers approved by Justice,” according to a report last week by Vicki Bryan, an analyst at GimmeCredit.[/SIZE]
[SIZE=10pt]See Story: http://www.nytimes.com/2013/11/05/business/us-in-talks-to-settle-suit-over-american-us-airways-merger.html?_r=0[/SIZE]
