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Thursday, March 28, 2024

Okla. AG urges DOJ to let airline merger proceed

Pruitt

OKLAHOMA CITY (Legal Newsline) -- Oklahoma Attorney General Scott Pruitt is urging the federal government to allow a merger between American Airlines and US Airways to proceed.


Pruitt sent a two-page letter to U.S. Attorney General Eric Holder Thursday.



The attorney general said the proposed merger is "vitally important" to his state's economy.


"A review by the Oklahoma Attorney General's Office found no violation of the state's antitrust laws in the proposed merger between American Airlines and US Airways," Pruitt wrote in the letter. "It is evident the merger would actually benefit consumers."


In February, the boards of directors of both AMR Corporation, the parent company of American Airlines Inc., and US Airways Group Inc. unanimously approved a definitive merger agreement under which the companies will combine to a create a "premier global carrier" that will have an implied combined equity value of about $11 billion -- based on the price of US Airways' stock as of Feb. 13.


American Airlines currently employs more than 6,000 workers at its maintenance facility in Tulsa.


"The merger offers the most viable path forward to secure the maintenance jobs in Tulsa and ensure the continued economic prosperity of Oklahoma," Pruitt wrote Holder.


In August, a coalition of six states, the U.S. Department of Justice Antitrust Division and the District of Columbia filed a federal court complaint challenging the merger, which would make the combined US Airways and American Airlines the largest worldwide carrier.


The complaint alleges reducing the number of major airlines from five to four would make fare and fee increases easier, and would make airlines even more profitable than they already are.


The six states are: Arizona, Florida, Pennsylvania, Tennessee, Texas and Virginia.


Texas has since settled with the airlines. Florida's attorney general, Pam Bondi, is being pressured by the state's federal lawmakers to back the merger.


American Airlines said the combined airline -- which will be called American Airlines -- will offer more than 6,700 daily flights to 336 destinations in 56 countries and is expected to maintain all hubs currently served by both airlines, resulting in more travel options for customers.


The company will be headquartered in Dallas-Fort Worth, but will maintain a "significant corporate and operational presence" in Phoenix.


"The combined airline will have the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace," Doug Parker, chairman and chief executive officer of US Airways, said in February.


"Our combined network will provide a significantly more attractive offering to customers, ensuring that we are always able to take them where they want to travel, when they want to go."


The merger was set to close in September, but still needs government regulatory approval.


From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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