Facts

U.S. Attorney General and the States of Arizona, Florida, Michigan, Tennessee, Texas, the
Commonwealths of Pennsylvania and Virginia, and the District of Columbia sued US Airways Group Inc. and AMR Corp. (American), alleging violation of the antitrust law to enjoin the planned merger of the two major airlines. Plaintiffs sought equitable and other relief. The proposed settlement was part of a plan to bring American out of bankruptcy.

PLAINTIFFS' CONTENTIONS:
Plaintiffs contended that the airlines' planned merger would create the "world's largest airline," which would hamper competition and would create a monopoly. As a result, the proposed merger would cause hundreds of millions of dollars of harm to American consumers. Plaintiffs requested that the airlines be permanently enjoined from merging.

DEFENDANTS' CONTENTIONS:
Defendants contended that the proposed merger would enhance competition and provide immense benefits to consumers. Defendants also contended that the proposed merger was pro-competitive and lawful. Defendants argued that plaintiffs' request for a permanent injunction should be denied.

Result

The parties agreed to settle the matter, which required certain divestitures. As part of the settlement, the airlines were required to relinquish 104 flights slots at Washington Ronald Reagan National Airport. The airlines were also required to give up 34 flight slots at New York's LaGuardia Airport, as well as smaller divestitures at five other airports. The flight slots include takeoff and landing rights, as well as airport terminal gates.