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As U.S. regulators spent the better part of six months preparing to sue to stop the American Airlines-US Airways Group Inc. merger, the carriers devised a plan to allay some antitrust concerns: an offer to cede flight slots at Washington’s Reagan National Airport, Bloomberg News reported yesterday. While the proposal fell flat, the talks show the stakes at an airport where a merged carrier would control 69 percent of the flights. The airlines’ overtures weren’t enough, and the Justice Department sued on Aug. 13 to block the deal. If there’s a way to settle the case, one element would almost certainly have to be a loosening of the airlines’ grip at National. JetBlue Airways Co. and Southwest Airlines Co. have said AMR Corp.’s American and US Airways should be forced to give up some slots, a step ordered in other mergers.

American Airlines and its creditors' committee on Friday urged a bankruptcy judge to approve the airline's restructuring plan despite an antitrust challenge from the Department of Justice, Reuters reported on Friday. AMR Corp. said in a court filing that failure to approve the restructuring would add "a destabilizing factor" to its proposal to merge with US Airways Group and pay back creditors. AMR's creditors' committee, in a separate filing, said refusal by Bankruptcy Judge Sean Lane to his approval to the plan could threaten creditor support for the plan, which includes AMR's unions and most of its creditors.

The U.S. Bankruptcy Court for the District of Arizona granted conditional approval to Swift Air of its proposed second amended disclosure statement and authorized the company to immediately begin the process of soliciting creditor acceptances of its proposed plan of reorganization, PRNewswire reported today. The bankruptcy court has also scheduled a confirmation hearing on the company's reorganization plan for Sept. 30. The creditors' committee in the company's chapter 11 case has given its full support and endorsement of the company's plan and strategies for emergence from bankruptcy, anticipated to occur by mid-October. In addition, the court has authorized the company to secure additional Boeing 737 aircraft to support s current clientele and to serve new customers with its planned diversification into the ACMI (aircraft, crew, maintenance and insurance) market.

American Airlines and US Airways are seeking a 10-day trial that would begin Nov. 12 in U.S. federal court to fight the challenge by the U.S. Justice Department to their proposed merger, which would form the world's biggest carrier, Reuters reported yesterday. In a court filing on Thursday, the carriers said the proposed date would give the Justice Department 90 days of trial preparation. By contrast, the 180 days requested by the government would be "far longer than any of its other merger trials in the century," the filing added. The bankruptcy status of American adds to the airlines' urgency to have the lawsuit heard. The merger would be the mechanism by which American parent AMR Corp. exits bankruptcy. The Justice Department sued last week to block the merger, saying it would reduce competition and lead to higher airfares.

A U.S. bankruptcy judge yesterday held off approval of a restructuring plan for American Airlines, citing a U.S. government challenge this week to the airline's proposed merger with US Airways Group Inc., Reuters reported yesterday. American's parent company, AMR Corp, worked out the $11 billion merger with US Airways as part of a plan to exit bankruptcy, where it has been since 2011. Bankruptcy Judge Sean Lane had been expected to approve the plan at a hearing yesterday. But the U.S. Justice Department earlier this week sued to block the merger, saying that it would lead to higher fares and hurt consumers. Instead of approving the plan, Judge Lane gave AMR and its creditors until Aug. 23 to submit briefs on how he should proceed. Judge Lane said he needed more information about the appropriateness of approving the restructuring plan in light of the antitrust challenge.

The strength of the U.S. Justice Department's antitrust suit to block the merger between AMR Corp. and US Airways Group Inc. is the first topic on the video with Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle. Rochelle tracks the rise and fall in the price of AMR's stock and analyzes the strengths of American Airlines Inc. even without a merger. To view the video, please click here: http://www.youtube.com/watch?v=bzHDtX6PSyI&list=PL_500m6Wb0wjRwfUjzisq9…

AMR Corp. could face months of new restructuring talks, with shareholders likely to suffer the biggest blow, if its merger with US Airways Group is successfully blocked by the U.S. government, Reuters reported yesterday. The Justice Department on Tuesday sued to stop American Airlines' parent from combining with US Airways, saying the proposed tie-up would reduce competition and hurt consumers by leading to higher airfares and fees. The two airlines vowed to defend the $11 billion deal in court. If the government succeeds, it would send AMR, which has been in bankruptcy since 2011, back to the drawing board to figure out how to pay back creditors, fund a restructuring and improve its business model. Some of AMR's financial issues were resolved before the merger was announced in February. Most notably, the company had reached money-saving labor deals with the unions after months of bitter talks, and the agreements are not contingent on the merger.

The Justice Department, along with the attorneys general of six states and the District of Columbia, filed a lawsuit yesterday seeking to block the proposed merger of American Airlines and US Airways, the New York Times DealBook blog reported yesterday. Dealing an unexpected blow to a yearlong effort to create the world’s biggest airline, the Justice Department said that the merger between the two airlines would substantially reduce competition, increase air fares and cut service to travelers. After approving a series of mergers between the nation’s airlines in recent years, the Justice Department’s decision came as a surprise to both carriers, who had expressed confidence the deal would go through with only a few changes. Antitrust regulators had not challenged an airline merger since the planned tie-up between United Airlines and US Airways in 2001. In recent years, however, consumer groups and some economists have warned that the wave of consolidation in the airline sector had contributed to higher airfares and less choice for consumers. The civil antitrust lawsuit to challenge the planned deal was filed in the United States District Court for the District of Columbia. The Justice Department said the vast majority of domestic airline routes were already highly concentrated. A merger of American and US Airways, it said, would result in four airlines controlling more than 80 percent of the United States market for commercial air travel.

Against criticism from the U.S. government's executive-bonus watchdog, attorneys for American Airlines's parent company defended the $20 million severance payment promised to departing Chief Executive Tom Horton, arguing that the bill would be paid once the company merges with US Airways Group Inc., Dow Jones Daily Bankruptcy Review reported today. In court papers filed on Thursday, attorneys for AMR Corp. argued that the company has the power to promise the severance payment to Horton as part of its chapter 11 reorganization plan because the payment money would come from "the surviving entity of the merger with a new asset base."

The pilots of AMR Corp.'s American Eagle unit say they want more information about what their fate will be when AMR's merger with US Airways Group Inc. is finalized, Dow Jones Daily Bankruptcy Review reported today. Lawyers for the Air Line Pilots Association union said in a court filing on Tuesday that while it doesn't object to the historic merger, it wants the American Airlines parent to explain what it plans to do with the American Eagle arm.