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Agreement reached to allow airline merger; local effects uncertain

Tuesday, Nov. 12, 2013 12:50 PM
Last updated Wednesday, Nov. 13, 2013 12:49 AM
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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.

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Passangers exit a U.S. Airways Express plane at Augusta Regional Airport Tuesday evening. U.S. Airways and American Airlines are merging and Augusta hopes to keep it's direct flight to Washington D. C. through the merger.   EMILY ROSE BENNETT/STAFF
EMILY ROSE BENNETT/STAFF
Passangers exit a U.S. Airways Express plane at Augusta Regional Airport Tuesday evening. U.S. Airways and American Airlines are merging and Augusta hopes to keep it's direct flight to Washington D. C. through the merger.

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.

WHAT THE AIRLINE MERGER MEANS FOR YOU

No changes will come immediately. Since announcing the deal in February, the two airlines have been working to try and make the merger as seamless as possible. When the deal does close, here’s what passengers can expect:

AIRFARE: The price of a domestic round-trip flight has climbed more than 15 percent since 2009, when adjusted for inflation, according to the Bureau of Transportation Statistics. The merger will give a combined American and US Airways Group Inc. the ability to increase fares. United, Delta and Southwest would likely follow. It could also pave the way for further expansion by discount airlines such as Spirit Airlines Inc. and Allegiant Travel Co.

FREQUENT FLIER MILES: Your miles will be safe. After the merger closes, the two airlines will likely combine the miles into one program and an elite status from one airline will likely be honored on the other. The merged carrier will continue American’s participation in the OneWorld alliance, which was founded by American, British Airways, Cathay Pacific and Qantas.

DESTINATIONS: A key reason for merging is to link both airlines’ networks, creating a system on par with Delta and United. There is little overlap between the two airlines’ existing routes. The combined carrier will offer more than 6,700 daily flights to 336 destinations in 56 countries, making it easy to fly with few connections. US Airways passengers will gain access to American’s international destinations, particularly London and Latin America. American’s passengers will be able to better connect to smaller U.S. cities that US Airways serves.

PASSENGER CONFUSION: The merger of two airlines often means confusion and hassle for customers. Which terminal or ticket counter do they go to for check in? If there is a problem with a ticket, which company should they call? For a while, United and Continental were issuing two confirmation numbers for each ticket, so either airline’s staff could make changes. It could be months, if not years, until all American and US Airways planes get a uniform paint job.

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Riverman1
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Riverman1 11/13/13 - 06:52 am
2
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That prop plane with the

That prop plane with the stairs going down on the tarmac reminds me of a 1940s movie.

Bulldog
1333
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Bulldog 11/13/13 - 09:54 am
0
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Why bother?

The TSA has made airline travel so onerous that I, for one, just don't fly anymore unless I can't get there any other way.

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