Broad Divestitures Wanted from DOJ
 

New WSJ article says:

U.S. Wants Broad Divestitures From US Airways, AMR

U.S. antitrust authorities want to see a broad package of divestitures from AMR and US Airways Group as part of any deal to settle the government's challenge to their merger plan, people familiar with the matter said.

Anyone have full article?


http://m.us.wsj.com/articles/SB10001424052702303661404579176240996479718?mobile =y

Put "U.S. Wants Broad Divestitures From US Airways, AMR" in google. Not sure how google gets to do it, but you can read the whole thing. Not much to it.

Tried that and all links and sites end up leading back to the WSJ paid for site. Thats why I was asking for someone to copy and paste the whole article.

U.S. antitrust authorities want to see a broad package of divestitures from AMR Corp. AAMRQ +7.48% and US Airways Group Inc. LCC +2.14% as part of any deal to settle the government's challenge to their merger plan, people familiar with the matter said.

The people said talks are under way between the two sides three weeks before a trial of the antitrust challenge is set to open in Washington.

The Justice Department's antitrust suit, which sought to block the merger of AMR's American Airlines and US Airways, argued that the deal would harm consumers by reducing air service and increase fares. It listed more than 1,000 routes on which regulators believed competition would suffer.

The opening of settlement talks suggests that the government isn't taking an absolute stand against the deal, and that a trial isn't a certainty. At the same time, however, the airlines might resist the broad concessions that the government is seeking.

A person familiar with the Justice Department's thinking said department lawyers insist that any settlement should include divestitures at key airports throughout the U.S. The department believes that the two airlines would need to divest assets at those airports to ensure that their merger wouldn't limit consumer choices on nonstop and connecting flights or harm consumers by raising fares, this person said.

The airlines are prepared to give up slots at Reagan National Airport outside Washington, where US Airways is already the dominant carrier, and make some divestments at other U.S. airports, two people familiar with the negotiations said last week. A person familiar with the process said Sunday that the airlines' settlement proposal would include divestments at other U.S. airports besides Reagan National.

Some of the busiest U.S. airports have limited room for competitors to expand, either because takeoff and landing slots are limited or because there aren't enough gates. LaGuardia and John F. Kennedy International airports in New York are among those with limited slots, while airports in Chicago and Los Angeles have limited gate space.

Another asset in limited supply is permission to fly to some international destinations. US Airways recently obtained rights to offer service to São Paulo, Brazil.

If combined at their current size, AMR and US Airways would vault past United Continental Holdings Inc. UAL +4.68% and Delta Air Lines Inc. DAL +1.21% as the largest carrier in the world by traffic. AMR and US Airways say the merger would offer fliers more choice and a bigger route network.

The Justice Department's suit challenging the merger warned against overconcentration in the U.S. air-travel market if the deal went ahead as planned, because it would leave the U.S. with just four airlines controlling more than 80% of the domestic market.

Both sides have said they are prepared to go to trial, which is scheduled to begin Nov. 25.

Let's hope egos don't get in the way of this thing.
I hope it's realistic, the doj makes it seem like we would have to pull out of major aports for this to work.

The DOJ's suit is very wide ranging. I can't see how they could settle now for a few DCA slots, but I can see how they could settle for those and a lot of other vague things that they could use to show a win. Like a promise of gate access at CLT for airlines that wanted them.

Always lots of BS thrown around in things like this. We'll see who produced the most.

"make some divestments at other U.S. airports"

I'm sure Rich Parker knows what the DOJ wants by now and his settlement proposal will reflect that. Hopefully they can meet somewhere in the middle.

The other day the CEOs called me up and said, Gallifrey, what should we do? I said, "Amigos, we should settle" :rolleyes:

Broad Divestitures Wanted from DOJ
 

Analysts say they are far apart in their negotiations but will eventually meet in the middle.

3 weeks til start of trial, plenty of time for negotiating and hardball.

Some sources say that there is a large financial incentive for the airlines to have the deal closed by 12/31. Not having the deal sealed by the new year has certain financial drawbacks that are larger than giving up a handful of assets.

Can you post some of those links?