Aug. 02--Now that American Airlines' creditors and shareholders have overwhelmingly approved its bankruptcy-reorganization plan to merge with US Airways, several steps remain before the deal is done.
The federal court overseeing the bankruptcy of AMR Corp., American's parent, has scheduled a hearing Aug. 15 to approve the plan.
European Union antitrust regulators are poised to sign off by Tuesday. The EU is expected to announce that a competitor airline -- in addition to British Airways and the combined US Airways-American -- will fly between Philadelphia and London.
That's because American has a business arrangement with British Airways and a financial stake in transatlantic flights. A third airline would help stabilize ticket prices on one of the most lucrative business-travel routes.
The Justice Department also is looking at the impact of the $11 billion merger. Justice can choose to weigh in, but is not required to, experts say, and the merger can proceed unless the Justice Department acts to block it.
U.S. regulators could require the new American, as the combined carrier will be called, to divest or sell slots (takeoff and landing times) at Reagan National Airport in Washington. US Airways and American now control two-thirds of the slots there.
But more than 100 members of Congress do not want that to happen. U.S. Rep. Mike Michaud (D., Maine), U.S. Rep. John Duncan (R., Tenn.), and 104 bipartisan colleagues wrote in May to Transportation Secretary Ray LaHood and Attorney General Eric Holder, asking that the deal go through with no asset sales.
They expressed concern that if the combined carrier were required to sell slots, it would mean fewer flights to smaller cities such as Bangor and Portland, Maine.
"Other airlines lack the necessary connectivity out of Reagan National and would be more likely to transfer any divested slots to larger cities and more lucrative routes," the lawmakers wrote.
"Many of us represent communities that receive nonstop service to the nation's capital, in large part due to US Airways' use of Reagan National as a hub of operations," the letter said. "Requiring a reduction of slots by the merged company could reduce the flights to our communities and the economic benefits these flights provide."
US Airways CEO Doug Parker, who will head the new American, told a Senate subcommittee in March: "US Airways has historically provided extensive air service to small and medium-size communities, and the new American Airlines will continue that commitment."
On Thursday, AMR Corp. said preliminary voting results showed at least 88 percent of the creditors' ballots were for approval of the plan. More than 99 percent of AMR Corp. stockholders voted for the plan, the company said.
US Airways is Philadelphia's dominant airline, with 458 daily departures from here to 113 nonstop destinations, including 27 international cities. On average, 900 US Airways and US Airways Express flights take off and land each day at Philadelphia International.
The new American will be the world's largest carrier by passenger traffic. It will fly to 6,700 destinations, have nearly 100,000 employees and $40 billion in annual revenue, and operate 1,500 aircraft.
AMR filed for Chapter 11 bankruptcy protection in November 2011. In February, US Airways and American announced the tentative merger agreement, pending shareholder and regulatory approvals.
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