World's biggest airline set to become reality after settlement
American Airlines, US Airways settle antitrust lawsuit
The world's largest airline will soon to be taking to the skies. Both American Airlines and US Airways have reached a settlement with federal regulators that has set the runway clear fro the beginning of the biggest airline the world has seen.
There was some sacrifice involved as well. The airlines had to give up slots at both New York's LaGuardia and Washington, D.C.'s Reagan National Airport, which means the combined company would operate 12 fewer daily departures at LaGuardia and 44 fewer at Reagan.
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Both airlines are giving up two gates at major airports in Los Angeles, Miami, Dallas, Chicago and Boston.
"It was certainly more painful than they anticipated," Jeff Straebler, an analyst at John Hancock Financial Services says. "Overall, it's still a win for them. A merger with these concessions is much better than no merger," he said.
Both airlines promised to maintain their hubs at seven airports, including John F. Kennedy International, for three years, easing critics' concerns about the loss of jobs and flights.
The agreement guarantees "a bigger foothold for low-cost carriers at key U.S. airports," Attorney General Eric Holder said in a statement.
Still pending court approval, the companies expect the merger to be completed in December. The tie-up would pull American Airlines out of bankruptcy two years after filing for Chapter 11 protection.
In reaction, American's shares jumped 26 percent in over-the-counter trading to $12. US Airways shares, which are up about 73 percent so far this year, rose one percent to $23.52.
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