American Airlines was one of the airline industry’s darlings. A legacy airline, it was a household name, a massive entity, employed thousands, and commanded a fearsome presence among other industry players like unions and airport terminals. However, with ballooning costs and the red ocean airline industry’s evolution, American Airlines’ parent company, AMR, was forced into bankruptcy in November 2011. To emerge from Chapter 11, American Airlines and U.S. Airways announced plans to merge and come out a stronger, larger airline in February 2013. The Department of Justice Antitrust Division shortly thereafter filed a lawsuit opposing the merger, alleging it would have anticompetitive effects by decreasing the number of industry competitors and increasing prices. However, the lawsuit, despite having substantial reasons to move forward to trial, settled in November 2013. This Note will discuss the potential motivations behind this settlement, ultimately arguing that political considerations, which normally do not play a role in antitrust enforcement, were the driving factor.
Politics in the American Airlines-U.S. Airways Merger and Antitrust Settlement,
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