Government
2:34 pm
Tue October 1, 2013

Texas Drops Its Challenge To Airline Merger; American To Keep DFW Hub

The state of Texas has dropped its opposition to the American Airlines-U.S. Airways merger.

Texas Attorney General Greg Abbott says he’s reached an agreement that will keep American’s headquarters in North Texas and maintain DFW as a “large hub airport.” American will also maintain daily service to more than 20 airports across Texas, many serving rural parts of the state.

Tuesday’s announcement marks an about-face for Abbott, who in August said the merger would have violated antitrust laws.

Abbott said he dropped his opposition to the merger after making sure that American, which is based in Fort Worth, continues serving rural communities across Texas. Military members rely on American Eagle airplane service to and from Killeen, near Fort Hood;  San Angelo, which is near Goodfellow Air Force Base; and Abilene, which is near Dyess Air Force Base.

"Our first and foremost concern was ongoing service to rural communities," Abbott said this afternoon at a press conference at Dallas-Fort Worth International Airport.

Texas was among several states and the District of Columbia that were part of the Justice Department’s antitrust suit to try to block the merger. The other states include Arizona, where U.S. Airways is headquartered; Florida, Pennsylvania, Tennessee and Virginia.

“Our agreement with the Texas attorney general is an important step forward,” American CEO Tom Horton said at the press conference. “We at American are very committed to Texas and we are committed to the Dallas-Fort Worth area.”

Here's a copy of the agreement between Abbott and American.

In a column that ran in August in The Dallas Morning News, Abbott said the state decided to challenge the merger because it would violate antitrust laws. Abbott is seeking the Republican nomniation for Texas governor.

“The legal violations appear so overt that it would offend my oath of office not to take action,” Abbott wrote. “The merger would allow the new company to shed that competition and distort the marketplace – while harming competition for nearly 200 Texas routes."

While Texas dropped its opposition to the American-U.S. Airways merger, the Justice Department on Tuesday asked for a delay in the trial over the merger because of the government shutdown. The trial in the case is set to begin on Nov. 25.

In court papers, the government argued that the shutdown prevents it from getting ready for the trial.

KERA's Shelley Kofler attended Tuesday's press conference and will have more details on KERA Radio, 90.1 FM.

The Associated Press contributed to this report.