Largest airline cleared for takeoff

WASHINGTON American Airlines and US Airways plan to join and become the world’s largest airline within a month, after the Justice Department settled its lawsuit challenging the merger.

Justice officials say the settlement announced Tuesday will spur competition and perhaps reduce ticket prices for consumers because lowcost airlines — such as Southwest and JetBlue — would get airport slots the combined airline agreed to give up.

The merger partners will surrender 52 round- trip flights daily from Ronald Reagan Washington National Airport, 17 at New York’s LaGuardia, and one each at Boston, Chicago’s O’Hare, Dallas Love Field, Los Angeles and Miami.

“This agreement has the potential to shift the landscape of the airline industry,” Attorney General Eric Holder said.

Doug Parker, CEO of US Airways and the incoming CEO of the combined airline, said the cities that will lose direct service from the new American are still being considered. Parker said it’s likely that some communities currently served by the two airlines will lose service once competitors pick up those slots.

Tom Horton, CEO of American, said the loss of slots is “pretty modest,” totaling about 15% of the combined airlines’ slots at Reagan National and 7% at LaGuardia.

Another part of the settlement: The combined American agreed to maintain its hubs for three years in Charlotte, New York’s JFK, Los Angeles, Miami, Chicago O’Hare, Philadelphia and Phoenix.

For five years, the merged airline will continue daily service to each of the states participating in the lawsuit: Arizona, Florida, Pennsylvania, Michigan, Tennessee and Virginia.