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From Antitrust Law Daily, October 4, 2013

Oklahoma AG calls on Justice Department to drop challenge to American Airlines/US Airways merger

By Jeffrey May, J.D.

Oklahoma’s attorney general is asking the U.S. Department of Justice to drop its suit attempting to block the proposed $11 billion merger between US Airways Group Inc. and American Airlines’ parent corporation, AMR Corporation. Yesterday, Oklahoma Attorney General Scott Pruitt sent a letter to the U.S. Attorney General Eric Holder urging the Justice Department to allow the merger to proceed.

The Oklahoma attorney general’s office reviewed the proposed transaction and found no violation of the state’s antitrust law, according to Pruitt. The state attorney general contends that the merger would benefit Oklahoma consumers.

Oklahoma has a “compelling interest in the new American Airlines,” Pruitt said. The merger “is vitally important to Oklahoma’s economy,” he added.

American Airlines was identified as one of the largest private employers in the state. “The merger offers the most viable path forward to secure the maintenance jobs in Tulsa and ensure the continued economic prosperity of Oklahoma.”

The Oklahoma attorney general’s plea follows the recent decision of Texas Attorney General Greg Abbott to resolve that state’s differences with carriers. On October 1, the Texas attorney general announced that the state had entered into a settlement resolving the state’s concerns over the merger.

Abbott made clear that the state’s interest in pursuing the suit was to maintain service to rural airports in Texas and protect Texas jobs. Under the settlement, the merging parties would agree to retaining service to 22 airports, to maintain Dallas/Fort Worth International Airport as a “large hub airport,” and to maintain the headquarters for their merged entity in the Dallas Forth Worth metropolitan area. Abbott also noted that the state’s negotiations with the airlines confirmed that competition would be preserved.

Texas was among the original six states that, along with the District of Columbia, joined the U.S. Department of Justice in its August 13 antitrust complaint challenging the creation of “the world’s largest airline.” An amended complaint was later filed adding the State of Michigan. A trial in the matter is set to begin on November 25 in the federal district court in Washington, D.C. (U.S. v. US Airways Group Inc., Case 1:13-cv-01236).

Companies: AMR Corp.; US Airways Group, Inc.

MainStory: TopStory Antitrust AntitrustDivisionNews OklahomaNews

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