Feds to Let American, US Airways Merge

The feds have agreed to allow American Airlines and US Airways to merge, a move that will create the world's biggest airline. The Justice Department agreement requires the airlines to scale back the size of the merger at Washington's Reagan National Airport and in other big cities, and to give up some of their runway slots in New York, Boston, Chicago, LA, Dallas, and Miami to low-cost carriers. The settlement requires approval from a federal judge, and it heads off a trial that was set to begin Nov. 25.

The combined airline will operate 44 fewer daily departures at Reagan National and 12 fewer at LaGuardia thanks to the concessions, though it will still be Washington's top airline. American and US Airways currently represent about two-thirds of Reagan's traffic. One S&P analyst says that the airlines gave up more than he expected but that the settlement shouldn't change the financial benefits of the merger to the companies. (More US Airways stories.)