Airline's plan nears confirmation
NEW YORK — A federal judge signaled on Thursday that he is leaning toward approving American Airlines' emergence from bankruptcy protection but wants more time to reflect.
“I'm finding the arguments in favor of confirmation fairly persuasive,” Judge Sean H. Lane said from the bench. He could sign off on American's restructuring plan at the next hearing on Sept. 12 or in a written decision before that.
Such a decision would leave only one obstacle — albeit a big one — to American's proposed merger with US Airways: an antitrust lawsuit filed by the government this month.
That suit filed by the Department of Justice, six states and the District of Columbia argues that the merger would leave four airlines controlling more than 80 percent of domestic air traffic and drive up prices.
That case is at least two months away from being resolved, unless the airlines and government reach an out-of-court settlement first.
Lawyers for American's parent company, AMR Corp., and for its creditors told the bankruptcy judge that the lawsuit should not have any bearing on his decision. They noted that his acceptance of the restructuring plan — one OK'd by American's shareholders — is subject to regulators' approval.
Stephen Karotkin, a lawyer with Weil, Gotshal & Manges who represents American, said the airline's creditors and shareholders stand behind the restructuring plan.
Not approving it, Karotkin said, would inject an “unwarranted element of uncertainty” into American's fate. Even if the merger fails, he said it is “inconceivable” that the airline would face liquidation or need further court-approved restructuring.
The Department of Justice was particularly concerned that the newly combined airline would account for 69 percent of the takeoffs and landings at Ronald Reagan Washington National Airport. It looked — for the first time — beyond nonstop routes, saying connecting flights between 1,043 city pairs would no longer have an acceptable level of competition.
Some of those routes have very few passengers. For instance, there are five people, on average, each day flying between Little Rock and Harrisburg, and five flying in the other direction, according to government data.
The Department of Justice has suggested bringing the case to trial no sooner than March 3. American and US Airways say such a delay would cost them millions of dollars and potentially kill the merger. They have proposed a start date of Nov. 12 for the trial in Washington. U.S. District Court Judge Colleen Kollar-Kotelly will meet with the parties on Friday.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Range Resources to pay $4.15M fine, close old gas drilling impoundments
- Chrysler roars back with latest 200
- Pa. unemployment rate rises to 5.8 percent
- FDA revises food safety rules due out next year
- Parasitic load issue solvable with some probing
- CNG autos slow to make inroads into U.S. market
- GlaxoSmithKline’s $492M fine is largest in China
- Alibaba stock soars in frenetic trading debut
- Ferrari growth would benefit Fiat
- 5 Facebook settings to change now
- Stocks drift amid Alibaba’s IPO drama