In a settlement with the Justice Department, US Airways and American Airlines said flights from small and medium-sized cities into Washington, D.C.’s Reagan National Airport would not be lost when it merges next month, creating the world’s largest airline.
Officials in Augusta were concerned that the merger would eliminate a direct US Airways flight linking Augusta with Reagan National if the combined airline was forced to divest slots at the nation’s capital.
However, a spokesman for US Airways wouldn’t specifically say Tuesday that the Augusta-to-Washington flight was safe.
As part of the federal lawsuit settlement, the newly combined US Airways-American Airlines would have to sell 52 slots at Reagan National, but issued a statement saying it agreed with the government to “ensure” that service to small and medium-sized markets be maintained.
“The new American has agreed with the DOT to use all of its (Reagan National) commuter slot pairs for service to these communities,” said an American Airlines statement.
The settlement would require approval by a federal judge in Washington. It would require American and US Airways to give up takeoff and landing rights, or slots, at Reagan National and New York’s LaGuardia Airport, and gates at airports in Boston, Chicago, Los Angeles, Dallas and Miami to low-cost carriers to offset the impact of the merger.
In August, the government sued to block the merger, saying it would restrict competition and drive up prices for consumers on hundreds of routes around the country.
In terms of the Augusta flight, US Airways spokesman Andrew Christie Jr., would only say that the acquiring airline would “have the opportunity to maintain service to those communities.”
“The new American will not end service to any cities,” Christie wrote in an e-mail. “All cities currently served by American and US Airways will retain service.”
Diane Johnston, the director of marketing at Augusta Regional Airport, said she was “hopeful that we will continue to receive non-stop service regardless of the divestiture.”
Within hours of the settlement announcement, Delta issued a statement saying it looks forward to the opportunity to acquire slots, particularly at Reagan National.
“Delta is the airline best positioned to continue competitive non-stop flights from Reagan National to small-and-mid-sized cities that could otherwise see service reduced or eliminated, which should be a strong consideration in the divestiture,” the airline said.
Augusta Regional is served by US Airways with flights to Washington and Charlotte, N.C., and by Delta and its carrier Atlantic Southeast Airlines with flights to Atlanta. The direct flight to Washington was introduced in July 2012. Just six month earlier, American Eagle suspended its flight between Augusta and Dallas as part of its parent company bankruptcy filing.
Attorney General Eric Holder said the agreement would ensure more competition on non-stop and connecting routes throughout the country. The department called the slot and gate divestitures at key airports “groundbreaking.”
Doug Parker, the US Airways CEO who will lead the new company, said, “This is very good news and we are grateful to all who have made it happen.” He thanked politicians and business officials who had joined his airline in lobbying for the merger.
The companies expect to complete the merger in December.
Six states had joined the lawsuit to block the merger, fearing the loss of flights and jobs at their airports. The Justice Department said that American and US Airways agreed to maintain for three years the US Airways hubs in Charlotte, Philadelphia and Phoenix, and American hubs at Miami, Chicago’s O’Hare Airport, New York’s John F. Kennedy International Airport and Los Angeles International.
If the settlement is accepted, the combined American and US Airways would operate 44 fewer daily departures at Reagan National and 12 fewer at LaGuardia. They run about 290 takeoffs a day at Reagan National – about two-thirds of the airport’s total – and 175 at LaGuardia now.
When it sued in August, the Justice Department was joined by Texas, where American is based, and Arizona, home to US Airways. They said the deal would hurt consumers in their states.
But six weeks later, the Texas attorney general, a Republican who is running for governor next year, pulled out of the lawsuit. Then the attorney general of Florida met with American CEO Tom Horton and expressed hope for a settlement, adding to the sense of crumbling opposition to the merger. Dozens of Democratic members of Congress implored the Obama administration to drop the lawsuit.
Last week, Holder confirmed that settlement talks were underway and added that he hoped a trial could be avoided. He seemed to set wide parameters on a possible compromise.
The tone of Holder’s comments was much softer than the tough, line-in-the-sand language used in August by William Baer, the assistant attorney general for antitrust issues, who had said that stopping the merger was the only proper outcome.
The Associated Press contributed to this story.