Is American Airlines performing too well in bankruptcy for its own good?

Last week, the airline reported $289 million in third-quarter earnings, the highest quarterly profit in company history. That followed second-quarter net income of $220 million.

With the Department of Justice challenging American’s proposed merger with US Airways on antitrust grounds, some analysts have begun to wonder aloud if the Fort Worth-based carrier essentially is proving the government’s case.

“It’s an interesting question,” Airline Weekly editor Seth Kaplan told me in a telephone interview. “But I actually think momentum is building for a settlement.”

Kaplan pointed to four recent developments to back his theory:

1. Texas dropped out of the DOJ lawsuit after a deal was forged to preserve service to airports in the state, keep a major hub in Dallas-Fort Worth and maintain the company’s headquarters in Fort Worth. That left just six states joining with the government.

2. U.S. District Judge Colleen Kollar-Kotelly denied a request by the Justice Department to delay the trial’s Nov. 25 start date. The DOJ complained that the government shutdown put its attorneys behind in their preparation.

3. Sixty-six Democratic congressmen petitioned President Barack Obama and the DOJ to drop the lawsuit, citing the potential economic impact of a failed merger on tens of thousands of employees at both airlines. That total includes about 6,300 American workers in Tulsa.

4. Three hundred American employees rallied near the steps of the Capitol in Washington, D.C., reflecting the enthusiastic support the deal has from labor.

The DOJ’s lawsuit was filed Aug. 13, just two days before a bankruptcy hearing was set to finalize the merger. Shareholders already had approved the deal, which was announced Feb. 15.

The government may have been rushed to block the combination and figured it would work out the details of its objection later, Kaplan said. In general, the DOJ charged that the merger would lessen competition and hurt consumers.

Along with American’s strong profits in the last two quarters, US Airways is expected to announce Wednesday revenues of better than $3.8 billion and earnings per share of $1.13, according to Bloomberg estimates.

Kaplan noted that American and US Airways were careful in their antitrust documents not to argue that the merger is necessary for the survival of either carrier.

Instead, executives said the combined airline would be “more capable of sustaining the economic shocks that have so characterized the airline industry” and would “generate enormous direct consumer benefit.”

Whether each airline would be viable on its own without merging is “not relevant to the antitrust analysis before the court,” the airlines contended.

Leverage?

In recent days, unconfirmed reports have emerged of hush-hush talks designed to reach a settlement with the DOJ.

Such a deal might be possible if the government can persuade American and US Airways to give up some landing slots at Ronald Reagan National Airport in Arlington, Va., Kaplan said. The two airlines combined would control more than 60 percent of the slots there.

Could the DOJ have wanted this all along, and have filed the antitrust lawsuit as leverage?

“It’s possible,” Kaplan said. “But that would be like killing a mosquito with a nuclear bomb.”

More likely, he said, is that the DOJ really was worried about the consumer impact — maybe even to an extent that stresses credulity.

“It seems like the government wants to create an environment where air fares are the same as they were early in the last decade,” the Airline Weekly editor said. “But that was a time when fuel costs were less and you had almost the whole industry in bankruptcy.

“Airfares are a little higher now, but you also have a viable sector.”

And, despite American’s big third-quarter profit, Delta Air Lines, which has higher fixed costs, reported Tuesday earnings per share of $1.41 on revenues totaling $10.5 billion. Delta and Northwest Airlines merged in 2008, followed by United Airlines and Continental Airlines in 2010.

“American — even with its recent third-quarter earnings being the best in company history — without a merger just places in about the middle of the pack as far as the major airlines go,” Kaplan said.

“So, that’s another reason to bet there will be some kind of settlement.” ___

Photo Credit: These were heady days when American Airlines CEO Tom Horton, left, and US Airways CEO Doug Parker posed for a photo before an airplane model bearing the new American Airlines logo following a press conference announcing the two airlines' merger in the Terminal D Admiral's Club at Dallas-Fort Worth International Airport, Thursday, February 14, 2013 in Texas. Tom Fox / Dallas Morning News