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American Airlines, US Airways settle merger lawsuit

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American Airlines and US Airways have settled a lawsuit brought forward by the U.S. Justice Department, removing another obstacle to the controversial merger.

U.S regulators sued the airlines to try and stop the $11 billion merger in August, after its announcement in February this year. Both airlines say that the deal is necessary for their survival in the face of increased competition.

If the merger goes ahead, it would create the world's largest airline, which critics say would have a negative impact on flight and route competition across the United States. In a statement, Attorney General Eric Holder said:

"This agreement has the potential to shift the landscape of the airline industry, and ensures airline passengers will see more competition on nonstop and connecting routes throughout the country."

As part of the settlement agreement, slots will be opened by the airlines for use by rivals at several U.S. airports. Both airlines will give up 57 slots to low-cost carrier airlines at Ronald Reagan International Airport, and 34 slots at LaGuardia Airport in New York City. An additional two slots each will be released at Boston Logan International, Chicago O'Hare International, Dallas Love Field, Los Angeles International and Miami International.

The settlement paves the way for the merger to go ahead, pending a judge's approval.

Via: BBC

Image credit: American Airlines

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— By on November 13, 2013, 5:30 AM PST

Charlie Osborne

Contributing Editor

Charlie Osborne is a freelance journalist and photographer based in London. In addition to SmartPlanet, she also writes for business technology website ZDNet and consumer technology site CNET. She holds a degree in medical anthropology from the University of Kent. Follow her on Twitter. Disclosure