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In airline suit, U.S. antitrust enforcers try to build on wins

August 14, 2013

Mark Ostrau, co-chair of Fenwick & West’s antitrust group, is quoted in a Reuters article titled “In airline suit, U.S. antitrust enforcers try to build on wins” on the lawsuit filed by the United States Department of Justice and several states to block the proposed $11 billion merger of American Airlines and US Airways.

As summarized by Reuters, “The government argued that the merger would reduce competition for commercial air travel in local markets throughout the United States and cause passengers to pay higher airfares and receive less service.”

“One sign that government lawyers are dead set on blocking the deal can be found in an appendix to its lawsuit,” Ostrau is paraphrased as saying.

The appendix identifies 1,043 airline routes between two cities – what the industry refers to as “city pairs” – where the Justice Department says the combined airline, the world’s largest, would have a presumptively illegal monopoly or near monopoly. Ostrau is paraphrased as saying that “[t]here may be too many troublesome pairs for AMR and US Airways to resolve in a settlement, and that is something government lawyers must have known when they put the list in their suit.”

"If you wanted something to resolve, you would not have listed more than 1,000 problematic city pairs," Ostrau said.

According to Reuters, European regulators approved the merger after the companies agreed to give up two daily slots at London’s Heathrow Airport.