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Seven states have now joined the federal government’s lawsuit claiming that a merger between American Airlines and US Airways would be anticompetitive, while other, ‘hub’ states advocate in favor of the union. The side on which different states fall says a lot about the uneven economic impact the new uber-airline would have.
The state of Michigan was the newest addition to the list of plaintiffs in an amended complaint filed Thursday in U.S. District Court by the Department of Justice.
Arizona, Florida, Pennsylvania, Tennessee, Texas and Virginia have all joined the federal suit to block the merger between the two airlines, as well as the District of Columbia.
The Justice Department is suing to block the merger that would create the world’s largest airline by the number of routes and passengers. Federal antitrust lawyers say that merger will raise fares and limit competition on about 1,400 routes, affecting nearly every airport nationwide.
Attorneys general have been brought into reinforce the local consumer impact of the merger, even in states like Texas and Arizona, where the combination will have significant impacts on jobs.
American Airlines has about 6,300 employees in Tulsa, most at the company’s primary maintenance and overhaul base near Tulsa International Airport.
Employee unions at the airlines have rallied to have the Justice Department drop the case so the companies can continue with the merger.
The airlines said Michigan’s inclusion won’t affect their preparations for the Nov. 25 trial.
“The decision of the Attorney General of Michigan to join the Department of Justice does not diminish the strength of our case, nor our determination to complete this transaction and deliver the benefits of the combination to the customers and communities we serve,” said a joint statement from American Airlines and US Airways. “Both American Airlines and US Airways want the opportunity to compete together to enhance competition with the largest airlines in the U.S. — United, Delta and Southwest — and a number of fast-growing low-cost carriers. We look forward to our day in court.”
The case is being argued in a U.S. District Court in Washington, D.C.
The amended lawsuit was part of the first of many deadlines in the trial that parties in the case agreed to this week.
According to the preliminary schedule in the case, the airlines will need to submit a response to the lawsuit by Tuesday. The groups will exchange a preliminary witness list by Sept. 30 and there will be a status hearing on Oct. 1.
The antitrust case has also held up American Airlines’ efforts to emerge from its 21-month bankruptcy process. Bankruptcy Judge Sean Lane is holding another hearing in that case on Sept. 12 and has indicated that he may be willing to approve American’s bankruptcy reorganization plan even with antitrust suit pending.
The bankruptcy plan is entirely dependent on the merger with US Airways.
Proposed schedule in airline antitrust lawsuit
Sept. 6: Amended complaint to be filed
Sept. 10: Response to complaint due
Sept. 30: Exchange preliminary witness list
Sept. 30: Parties’ joint submission due
Oct. 1: Status hearing
Oct. 25: Close of fact discovery
Oct. 25: Plaintiffs’ expert disclosure
Oct. 30: Final deadline for requests for admissions to be served
Nov. 8: Defendants’ expert disclosures
Nov. 15: Supplemental and/or rebuttal expert reports
Nov. 20: Close of expert discovery
Nov. 25: First day of trial
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