The merger between American Airlines and US Airways is set to go ahead after the two carriers reached an agreement with the US Department of Justice.
The deal will end the need for a court trial which had been scheduled to start on November 25 and clears the way for the creation of an enlarged American Airlines in December.
Under the terms of the deal with the DOJ and six US states plus the District of Columbia (Washington DC), the two airlines will give up slots and gates at Reagan airport (52 slot pairs) in Washington DC and New York’s LaGuardia (17 slot pairs).
American and US will also give up two gates at each of Dallas Love Field, Los Angeles International, Boston Logan, Chicago O’Hare International and Miami International airports.
Doug Parker, chairman of US Airways and incoming CEO of the merged airline, said: “This is very good news and we are grateful to all who have made it happen.
“We are pleased to have this lawsuit behind us and look forward to building the new American Airlines together.”
The DOJ and the seven states filed a lawsuit in August claiming that the merger would restrict competition.
As part of the settlement, the new merged American Airlines has also agreed to maintain hubs at Charlotte, New York (JFK), Los Angeles, Miami, Chicago (O'Hare), Philadelphia and Phoenix "consistent with historical operations" for three years.
US attorney general Eric Holder said: “This agreement has the potential to shift the landscape of the airline industry. By guaranteeing a bigger foothold for low-cost carriers at key US airports, this settlement ensures airline passengers will see more competition on no-nstop and connecting routes throughout the country.
“The department’s ultimate goal has remained steadfast throughout this process - to ensure vigorous competition in airline travel. This is vital to millions of consumers who will benefit from both more competitive prices and enhanced travel options.”
The airlines' merger still has to be approved by the US Bankruptcy Court, and meet "certain other conditions" before it can be finalised.