The Justice Department is pressing for divestitures at airports throughout the United States as a condition for dropping a lawsuit aimed at stopping a proposed merger of US Airways (LCC.N) and American Airlines (AAMRQ.PK), U.S. Attorney General Eric Holder said on Monday.
Holder said that talks with the companies, whose merger would create the world's largest airline, were ongoing and that he hoped for an agreement before a trial begins on November 25.
"What we have tried to focus on is to make sure that any resolution in this case necessarily includes divestitures of facilities at key constrained airports throughout the United States," Holder said at a press conference.
"We hope that we will be able to resolve this short of trial but if we do not meet those demands that we have, we are fully prepared to take this case to trial," said Holder. "We will not agree to something that does not fundamentally resolve the concerns that were expressed in the complaint."
Shares of AMR Corp, parent of American Airlines rose 20 percent and shares of US Airways rose 4.5 percent after Holder's remarks.
In a complaint filed in August aimed at stopping the proposed deal, Justice focused on Reagan National Airport outside Washington. The two carriers control a combined 69 percent of takeoff and landing slots at the airport.
In its complaint, the federal government also listed more than 1,000 city pairings where the two airlines dominate the market and where a merger could conceivably drive up prices or cut the number of flights.
US Airways declined comment on Holder's remarks. American Airlines could not immediately be reached for comment.