Accessibility links

Breaking News

US Regulators Approve Creation of World's Biggest Airline

FILE - A U.S. Airways jet passes an American Airlines jet at Sky Harbor International Airport in Phoenix, Arizona, Feb. 14, 2013.
U.S. corporate regulators have approved the creation of the world's largest airline - a merger of two U.S. carriers, American Airlines and US Airways.

Antitrust regulators at the U.S. Justice Department had filed suit in August to block the $16 billion merger, claiming it would limit competition in the U.S. air industry and lead to higher fares for travelers.

But with the case set to go to trial later this month, the government reached a deal Tuesday with the airlines. They agreed to give up some of their takeoff and landing rights at seven key airports in the U.S., mostly at one of the three airports serving Washington. Under the agreement, the air terminal slots the two airlines are relinquishing will be handed to low-cost U.S. air carriers.

U.S. Attorney General Eric Holder said that giving airlines that offer cheaper fares a "bigger foothold" at the airports will ensure that travelers will see more competitive prices.

By some measurements, bankrupt American Airlines is already the world's largest air carrier. It ferried more than 80 million passengers last year to 250 destinations worldwide, while US Airways carried 50 million people to 200 destinations.

The merger follows the marriage of other air carriers in the U.S., with Delta joining with Northwest and United with Continental.