Why Are Some States Supporting the American-US Airways Merger?
US Airways (NYSE:LCC) and AMR Corp.’s (AAMRQ.PK) American Airlines just gained some allies in their battle to merge to create the world’s biggest airline and bring AMR Corp. out of bankruptcy. Officials from Florida, Texas, and North Carolina are pushing back against the U.S. Department of Justice’s suit to block a merger between the two companies, according to a report from Reuters.
The merger received approval from the European Commission after both airlines made antitrust concessions at London’s Heathrow Airport and passed a vote with AMR Corp.’s creditors before it was blocked from passing the final hurdle by the U.S. Justice Department last week. The DoJ was joined by six states and the District of Columbia in its suit to block the merger, saying in a filing that it would cut down on competition in the already shrinking U.S. airline market, thus raising prices for consumers.
Florida, Texas, and North Carolina are home to large hubs for the airlines, and these states believe the merger would help improve their economies. Miami-Dade County’s mayor came out in support of the deal, even though Florida is one of the states joined by the Justice Department in the suit to stop the merger, Reuters reports. American Airlines is one of the biggest employers in the county and operates about 70 percent of the flights at the Miami airport, an important hub for flights to and from Latin America.