American, US Airways extend merger deadline

September 23, 2013 - 3:34 PM
Airlines Merger Lawsuit

FILE - In this Tuesday, Aug. 13, 2013, file photo, a US Airways and an American Airlines plane are seen parked at the terminal at Washington's Ronald Reagan National Airport. US Airways and American Airlines announced Monday, Sept. 23, 2013, that they are extending their merger deadline by a month to give themselves time for the antitrust trial scheduled for November. That trial is scheduled to begin Nov. 25. (AP Photo/Susan Walsh)

FORT WORTH, Texas (AP) — US Airways and American Airlines are extending their merger deadline by at least a month to wait for the outcome of an antitrust lawsuit filed by the federal government.

That trial is scheduled to begin Nov. 25. The airlines' original agreement allowed either side to call off the merger after Dec. 17, but there might not be a verdict in the trial by then. The new agreement extends the merger deadline to Jan. 18 or later, depending on when the court rules.

The airlines were within weeks of closing their deal when the U.S. Justice Department sued in August to stop the merger, saying that it would hurt competition and boost prices. The airlines argue that other mergers were allowed to go forward and that their merger would create a stronger competitor to bigger rivals United and Delta.

The airlines also confirmed that they dropped an agreement to pay Tom Horton, the CEO of American parent AMR Corp., nearly $20 million in severance. If the merger is completed, he would step aside soon afterward while US Airways Group Inc. CEO Doug Parker runs the combined company.

The judge in AMR's bankruptcy case ruled this month that the payment to Horton would violate bankruptcy law.