American and US Airways wanted a November 12 trial date to adjudicate the Department of Justice’s anti-trust lawsuit. DOJ first wanted a February date, and then when that represented a conflict with the judge’s calendar they suggested March.
My original guess about the DOJ suit when it was filed was that, regardless of the legal merits, the biggest risk to the merger was endless delays in the courts — companies can’t make long term plans or investments while they don’t know their futures. A March trial date would have meant the DOJ effectively would have won its anti-trust suit by default.
Today the judge in the case ruled to set a November 25th trial date, which means that the anti-trust claims will ultimately either be settled or adjudicated on the merits. In other words, the merger should not get killed simply through delays.
American’s statement on the judge’s decision:
“We are confident in our case and eager to get to Court. We are pleased to have a trial date that will enable us to resolve this litigation in a reasonable timeframe. We want the opportunity to compete together to enhance competition with the largest airlines in the U.S. – United, Delta and Southwest – and a number of fast-growing low-cost carriers. We look forward to making the case for the new American Airlines beginning on November 25.”
No matter what you think of the merger — and my preference has always been for American to remain a standalone carrier — this is a major development. While an anti-trust suit reduced the odds of a merger happening, a November trial date keeps the possibility alive.
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That ruined a lot of people’s thanksgivings. 😀
I really hope that AA and US Air will remain separate and US Air will have the 50% transfer bonus next year…I have never taken advantage of that promotion but always wanted to. But this might be a better news as if this drags on til March 2014, the promotion may not happen at all.
Nice post. I agree with your take on this. I’m glad to see the judge set an earlier date as well. It’s one thing to kill a deal but it’s another to give it a life sentence.
Yeah, I want this dead, but DoJ shouldn’t play dirty. As is, ruining Thanksgiving is amusing to me.
I really, really want to see DOJ bring up the “US in oneworld” option as a counterpoint to the need for a merger.
The DoJ asking for a later trial date wasn’t “playing dirty.” It takes time to do the analysis carefully (and the DoJ is short-staffed right now because of the sequester). There’s a tradeoff, of course — delaying the trial causes problems for the merger — so the court shouldn’t automatically approve extensions. But the DoJ asked for the extension because they’re trying to do their job well, not because they’re “playing dirty” or anything like that.
Keep in mind 25 Nov is the tentative trial date. A 01 Oct date has been set for a status conference. Even 25 Nov leaves a lot to happen, and little room for delays.
http://www.chicagotribune.com/business/sns-rt-us-american-usairways-trial-20130830,0,880874.story
I have full confidence that the merger will go through as I have an undying belief that the US govt has been bought lock, stock and barrell by corporate America. Hope that all the AA ExecPlats enjoy those generous eVIPs while you can because Dougie is coming with his hatchet. 😀
It seems to me this enhances the prospects of a negotiated settlement.
Lets not lose sight that the Nov 25 date is just the start date, this could still go on for a while and kill the merger by attrition!
How much are you compensated by American? You keep ignoring my question which I think is hilarious. You are obviously compensated by airlines and refuse to admit it…
@Tyler I am not compensated by American or by any other airline.
Gary, don’t feed the trolls!