US Airways, AMR seek an extension for merger: report

Wed Sep 11, 2013 10:55am EDT

U.S. Airways jets are seen at Reagan National Airport in Washington July 12, 2013. REUTERS/Larry Downing

U.S. Airways jets are seen at Reagan National Airport in Washington July 12, 2013.

Credit: Reuters/Larry Downing

(Reuters) - US Airways Group Inc LLC and American Airlines parent AMR Corp said they would ask their boards to extend the termination date of their proposed $11 billion merger due to uncertainties related to a government lawsuit, the Wall Street Journal reported, citing sources.

The Justice Department filed a lawsuit on August 13 to stop the deal arguing the merger would violate antitrust laws because it would lead to higher airfares and related fees.

AMR Chief Executive Tom Horton and US Airways CEO Doug Parker, in response to questions from members of the creditors committee in AMR's bankruptcy case, said that they intended to extend the termination date in case the merger did not receive regulatory approval by December 17.

The new termination date was not known.

The companies have said that the deal is critical for American Airlines, whose parent, AMR Corp, has been operating under Chapter 11 bankruptcy protection since late 2011.

US Airways, in a filing Tuesday evening, argued that the deal was lawful and should be allowed to go forward.

(Reporting by Tanya Agrawal in Bangalore)