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Tuesday, August 6, 2013

EC Approves American Airlines-US Airways Merger

By Woodrow Bellamy III

The European Commission (EC) has issued regulatory clearance for the proposed $11 billion merger between US Airways and American Airlines to create the world's largest passenger airline. 
 
 
EC's announcement came following an agreement from both carriers to sell a pair of takeoff and landing rights to a rival carrier to fly between Philadelphia International and London Heathrow Airports. The commission found the merger would create a monopoly on the London-Philadelphia route, where US Airways and AA are currently the only carriers offering non-stop flights. Approval from EC is conditional upon releasing at least one daily slot pair at both airports.
 
"The  commission could clear this transaction in the first phase given the commitments offered by the parties which address the competition concern we identified on the London-Philadelphia route. The commitments include a corresponding slot at London Heathrow as well as far-reaching feeder arrangements to induce entry by a new competitor on the route," said Joaquin Almunia, vice president of competition policy for EC.
 
Both carriers will also be required to sign special feed traffic agreements with a new competitor on the route. 
 
Tom Horton, CEO of American Airlines parent AMR Corp., called the approval "one of the final milestones" toward completing the merger. 
 

The merger is still subject to approvals from other international regulatory agencies, including the Department of Justice in the U.S. In a statement, AMR said it still expects to complete the combination in the third quarter of 2013.  

 

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