After the Department of Justice and several states filed a lawsuit to block the merger between US Airways Group, Inc. (NYSE:LCC) and American Airlines parent company AMR Corporation (OTCMKTS:AAMRQ), the airlines have been looking for as many allies as possible. And recent developments indicate that the airlines have found more friends in both expected and unexpected places.
Defending the merger Throughout this process, labor unions at both airlines have show their support for the merger in the form of press releases, court filings, newspaper editorials, and mass rallies. Many members of Congress have also shown their support, as more than 60 congressional Democrats have signed a letter asking the Department of Justice to drop the lawsuit.
But another group of politicians are also showing their support, and they could be just as important as Congress.
Local government A recent letter is now indicating pro-merger support among many mayors from the cities seeing the heaviest involvement from US Airways and American Airlines. From the American Airlines side are the mayors of Dallas, Fort Worth, Chicago, and Miami-Dade County. And from the US Airways side are the mayors of Philadelphia, Phoenix, and Charlotte.
First of all, the support of some of these mayors is not too surprising. The mayors of Dallas and Fort Worth stand to benefit from a larger travel network centered on the Dallas/Fort Worth International Airport. Similarly, American isn't seen as a major threat to downsize operations at Chicago O'Hare or Miami International, and US Airways is not looking to shrink Charlotte operations.
But the support of two particular mayors shows the biggest positives from this letter. The mayors of Phoenix and Philadelphia are both in favor of the merger, in a move that may be surprising to some industry followers.
Because of Phoenix's location between American's Los Angeles and Dallas/Fort Worth hubs, many people are afraid Phoenix will be downsized. Similarly, fears surround Philadelphia that the airport could lose some international flights as the merged airline routes passengers through New York's JFK International.
And those fearful of more hub closures have past airline records to back them up. After the merger of Delta Air Lines, Inc. (NYSE:DAL) and Northwest Airlines, the Memphis airport has been steadily downsized from prominent hub status under Northwest to a de-hubbed airport where Delta is axing another 36 flights and 126 jobs.
Memphis had the unfortunate position of being too close to Delta's megahub of Atlanta Hartsfield-Jackson International. With such a huge presence in Atlanta, Memphis operations were not efficient for the merged airline.
Merger positives It appears that the mayors of Phoenix and Philadelphia have been convinced there will not be the same cuts applied to their airports as were seen in Memphis. And with all the political happenings in this merger battle, it would be reasonable to expect that the airlines at least talked to the mayors.