Texas Attorney General Greg Abbott says he now has assurances American Airlines’ merger with U.S. Airways won’t harm the state’s rural airports. So he’s withdrawing the state’s legal challenge.
In August, Abbott and attorney generals from five other states joined the U.S. Justice Department in a lawsuit seeking to block the merger.
Chief among Abbott’s concerns was that rural communities in Texas would lose their daily service.
Abbott says the three-year agreement with American and U.S. Air guarantees that won’t happen.
“We have seen in some other airline merger situations a reduction in capacity sometimes when mergers take place. This ensures that these 22 airports across the state of Texas especially in the smaller rural areas will not lack for service,” Abbott said during a press conference Tuesday.
The agreement also removes another Texas concern, that the headquarters of the merged airlines would be located in Tempe, Arizona, where U.S. Airways is based. The airlines have now pledged to base their carrier in Dallas-Fort Worth, American’s home.
Abbott denied that his change of course resulted from heavy criticism leveled by chambers of commerce and likely gubernatorial opponent Wendy Davis. They warned that opposition to the merger could damage the Texas economy.
Abbott says his goal was always to find common ground.
“We talked about resolving this before the lawsuit was filed,” he said when asked when he began negotiating with the airlines.
Seated next to Abbott, American’s Tom Horton told reporters the announcement comes at the end of a good week for his company where it announced record profits and plans to hire.
“For the first time in 10-plus years we will begin to hire pilots again- 1500 over five years,” Horton said.
Fort Worth Mayor Betsy Price said she was pleased the State of Texas is dropping its lawsuit but expressed concern that the Department of Justice challenge remains.
“Thousands of jobs in North Texas and across the nation hang in the balance,” Price said. “I continue to urge all parties involved this merger to quickly work out their differences so these companies, these employees and this community can move forward.”
The federal lawsuit is scheduled for trial in November.