Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Texas Attorney General Drops Out Of American Airlines Merger Lawsuit
Author: Joel R. Glucksman
Date: October 15, 2013
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The U.S. Department of Justice saw its lawsuit against the American Airlines-US Airways merger weakened this week after Texas Attorney General Greg Abbott announced that his state was dropping out of the case.
The loss of the state’s support comes as a blow to the federal agency, because American Airlines is based in Dallas-Fort Worth and the merged company would be headquartered there, USA Today reports. Abbott noted that he reached a settlement with the airlines, under which the merged airline will maintain scheduled daily service to more than twenty airports in Texas. The airlines announced they were pleased with Abbott’s decision, which eliminates another obstacle in their push to merge.
“We are very pleased that Attorney General Abbott worked with us and carefully considered the facts of the merger, and we appreciate his willingness to engage in a productive dialogue,” American CEO Tom Horton and US Airways CEO Doug Parker said in a joint statement. “We know all of you are pleased with this news as well and we thank you for making sure your voices were heard.”
Although Texas dropped out of the suit, Arizona, Florida, Michigan, Pennsylvania, Tennessee, Virginia, and the District of Columbia still support the federal agency’s anti-trust case.
The Justice Department has faced several obstacles in its quest to prevent US Airways and American Airlines from merging. In September, U.S. Bankruptcy Judge Sean Lane approved American’s reorganization plan, allowing it to successfully emerge from Chapter 11 bankruptcy law protection. Exiting bankruptcy proceedings was a key provision for the American-US Airways agreement. As an added hit, the Justice Department’s request for a temporary delay in the lawsuit as a result of the government shutdown was quickly rejected by the federal court. The two-week trial is set to begin as scheduled on Nov. 25.
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