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US Airways-United merger review drags on

| Wednesday, April 11, 2001

First, the target was year-end 2000. Then, it was April 2.

Now, it's anybody's guess when the merger of US Airways into United Airlines will be completed, said company and government sources Tuesday.

The federal review of the $11.6 billion deal has taken longer than anticipated. The U.S. Department of Justice has been combing the combination for possible violations of antitrust law since last summer.

'I don't think (approval) will come in the next 30 days, and it could be more like 60 days,' said Allegheny County Executive Jim Roddey yesterday.

'That's my speculation because I understand the Justice Department has not completed their review process,' Roddey added.

United and US Airways said they are still answering queries from the agency.

'There is no new date out there,' said United spokeswoman Susanna Leyva. 'At this time, we are working very cooperatively with the Department of Justice.

The task of government antitrust lawyers grew more complicated in January, when United agreed to sell US Airways assets worth billions, including its East Coast shuttle between Washington, New York and Boston, to American Airlines.

The review of the deal, which was announced last May, also may be dragging due to the change of administrations. President Bush's replacement for the Clinton administration's longtime chief antitrust enforcer, assistant attorney general Joel Klein, has not yet been named.

'There is no timetable,' said Gina Talamon, a Justice Department spokeswoman. 'Our investigation is continuing.'

If the Justic Department finds the merger breaks antitrust laws, the agency could sue to block the deal. That decision has not yet been made.

'Justice lawyers are the ones that have the big stick,' said Gary Kaplan, an antitrust and information technology attorney at Reed Smith in Pittsburgh. 'But they first would have to challenge the deal in court, and then the court has the final word.'

United and US Airways promised on March 6 to give the Justice Department 21 days' notice before they would close their deal. The companies have not done so, and spokespersons for each would not comment whether the merger partners would set a deal-closing date without first receiving the Justice Department's blessing.

Talamona's terse response: 'They can say whatever they want to say.'

'It's important to note this is a process of negotiation, a very complex series of negotiations,' said Kaplan.

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