Legal bills affect timing of US airlines merger case

American Airlines and US Airways are citing daily legal and other professional fees of US$ 500,000 as a reason why court hearings on their proposed merger should be heard as soon as possible.

Airline merger potowizard

The two airlines have requested a hearing date of 12  November to decide if their proposed $12 billion union can go ahead. However, the Justice Department - which opposes the plan on the grounds that it would reduce competition and raise passenger prices - wants a hearing in February.

Urgency

Under the package proposed by the two airlines, American Airlines would come out of its current state of bankruptcy and create the world's biggest airline through the deal. In a joint statement, the airlines said: 'The parties’ urgency to complete their transaction is far greater here than in ordinary merger cases. American’s ongoing bankruptcy proceedings compound the costs and uncertainties associated with the delays caused by the government’s lawsuit, including approximately $500,000 in bankruptcy-related professional fees alone every day that the bankruptcy continues.'

Jack Butler, a lawyer representing American's creditor's committee, told Bloomberg Law: 'For them to suggest they need to go into next year seems to me to be a strategy to try to kill the merger by fiat instead of them having to prove their case.'

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