Compass Lexecon Experts Provide Key Economic Advice and Analyses on US Airways and American Airlines Merger

On November 12, 2013, US Airways and American Airlines announced that they had reached a proposed settlement with the Department of Justice (DOJ) and several states to end the litigation challenging their merger and that, as a result, they expect to complete the merger by the end of 2013. Under the settlement, the parties agreed to divest slots and gates at several airports and to make certain other commitments, but otherwise are allowed to proceed with the merger that will create the world’s largest airline and, even with the divestitures, generate over $1 billion in estimated annual synergies. According to the Wall Street Journal: “Many antitrust and airline industry experts deemed the settlement a victory for the carriers, because it left the vast majority of their merger plan intact.”

This proposed settlement effectively brought to a close nearly two years of Compass Lexecon work on this matter, starting with separate teams advising both US and American on the merger, proceeding to a joint Compass Lexecon team submitting multiple white papers and making several presentations during the DOJ investigation of the matter, and culminating with the submission of four expert reports by Compass Lexecon experts (Dennis Carlton, Janusz Ordover, Dan Kasper, and Rajiv Gokhale) as part of the litigation. The clients have been universal in their praise of the work and their view that Compass Lexecon played a significant role in what they see as a successful resolution of the case.

Among those working on a large Compass Lexecon team supporting the multiple experts on the case were Mark Israel, Chip Bamberger, Darin Lee, Yair Eilat, Lynette Neumann, Eugene Orlov, Theresa Sullivan, Eric Amel, Bo Bourke, Jonathan Bowater, Mike Easterly, Jay Ezrielev, David Fenichel, Joseph Goodman, Nauman Ilias, Bryan Keating, Neal Lenhoff, Bich Ly, Ian MacSwain, Avisheh Mohsenin, David Molin, Greg Pelnar, Hans-Jürgen Petersen, Jonathan Polonsky, Jeff Raileanu, Michael Sabor, Rohini Sadarangani, Dan Stone, and Jonathan Williams. Throughout the case, Compass Lexecon worked closely with outside counsel, including Richard Parker and Henry Thumann of O’Melveny and Myers; John Majoras, Joe Sims, and Bruce McDonald of Jones Day; Rick Rule and Andrew Forman of Cadwalader, Wickersham, and Taft; Paul Denis and Paul Friedman of Dechert; and MJ Moltenbrey of Paul Hastings. Compass Lexecon also worked closely with inside counsel for the airlines, including Stephen Johnson and Howard Kass of US, and Bruce Wark and James Kaleigh of American.