Airlines Vow to Fight US Move to Block Merger

Lawyers for US Airways and American Airlines voiced confidence Wednesday that they can defeat the US suit to prevent their merger, but allowed that a negotiated deal was also possible.

A day after the US Justice Department sued to block the $11 billion merger, saying it would reduce competition and drive up fares, lawyers representing the two airlines called the move unjustified.

"Simply, they got this one wrong, they got this one very wrong," insisted Rich Parker of law firm O'Melveny & Myers in a call with analysts and journalists.

"We care about our customers and this merger benefits them immensely," he said.

"Both of these companies are looking forward with confidence to our day in court."

The lawyers disputed the evidence in the government's filing, which alleged that an effort to reduce competition and increase fares was the underlying motivation for the merger.

They said the government would have much difficulty proving its case to a judge, noting that the Justice Department's antitrust lawyers have won only one case to block a merger in the past eight years.

However, they acknowledged that settlements -- which can include agreements by the merging parties to divest certain businesses or pledge certain behavior -- was the common outcome.

Although they were confident of beating the suit, the lawyers said they were open to proposals from the Justice Department.

"If the government has a creative alternative here we will certainly listen to it," said Parker.

On Tuesday Assistant US Attorney General Bill Baer insisted the department wanted to block the merger, saying it would lead to higher prices and fewer services for passengers.

But he also left the door open to ideas for an alternative resolution.

The department is "always prepared to listen," he said, but added: "The better idea right now is to enjoin (stop) the merger."

Parker said they hoped to move to a trial as soon as possible and get it over with by year-end.

Source: AFP
Date: Aug 14, 2013