The Justice Department (DOJ) has reached a settlement to drop its opposition to the merger of American Airlines and US Airways, allowing the two carriers to create the world's largest airline.
Under the settlement, the merged airline will relinquish 52 slot pairs at Washington Reagan National Airport (DCA) and 17 slot pairs at New York's LaGuardia Airport (LGA), as well as certain gates and related facilities at those two airports. Two gates will also be released at Boston Logan International Airport, Chicago O'Hare, Dalls Love Field, Los Angeles International and Miami International.
DOJ originally filed the lawsuit to block the merger, claiming the new airline would reduce competition and lead to significantly higher airfare for passengers.
"This is an important day for our customers, our people and our financial stakeholders. This agreement allows us to take the final steps in creating the new American Airlines," said Tom Horton, chairman and CEO of AMR Corp., parent company of American Airlines.
Despite the divestitures of the gates and slots, the new American expects to generate more than $1 billion annually beginning in 2015.
The settlement still needs approval from the Federal District Court and by the judge overseeing American's bankruptcy proceeding. However, in a statement Tuesday American said it still expects to close the merger by mid-December.