[240913.EN.AIR] AA, US Airways Extend Merger Time In Face Of Justice Department Suit

THE parent company of American Airlines, AMR Corporation, and US Airways Group have agreed to extend the merger deadline a month because of a US Department of Justice lawsuit that seeks to block the merger because it would reduce competition.

The date on which either party can terminate the Merger Agreement has been extended from December 17 to January 18, the companies announced in a joint statement.

The move signals that they continue to push ahead with plans to merge the two airlines and create the nation's largest carrier.

In a joint statement, AMR chief executive Tom Horton and US Airways CEO Doug Parker said: "The boards and management teams of AMR and US Airways remain committed to completing this. Our focus is on mounting a vigorous defence and winning our court case."

A trial to hear the Justice Department's challenge to the merger is due to commence on November 25 at District Court in Washington. AMR, which had filed for bankruptcy in 2011, hopes the merger will allow the airline to clear bankruptcy, reports the Los Angeles Times.

If the judge rules against the challenge before January 17, the airlines will have 15 days to approve the merger.

AMR and US Airways have also agreed to scrap a US$20 million severance package for Mr Horton after the judge overseeing AMR's bankruptcy refused to permit the pay off.

Source : HKSG.