American Airlines and US Airways reached a deal with the government that lets the two form the world’s biggest airline and opens up more room at key U.S. airports for low-cost carriers.
The settlement announced Tuesday — if approved by a federal judge — would end a fight with the U.S. Justice Department and head off a courtroom showdown later this month.
It preserves hub airports in Phoenix, Philadelphia, Charlotte and four other cities for at least three years. And it caps a series of mergers that have already eliminated four big U.S. airlines and stoked fear about higher travel prices.
For American, the nation’s third-biggest airline, the deal lets parent AMR Corp. exit bankruptcy protection, repay creditors and reward shareholders.
At US Airways, the No. 5 U.S. carrier, shareholders will own 28 percent of the new company, employees stand to get more pay, and top executives will realize their dreams of running an airline even bigger than United or Delta.
The Justice Department said it extracted the largest divestitures ever in an airline merger. Attorney General Eric Holder said the agreement would ensure more competition on nonstop and connecting routes throughout the country.