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US Airways shareholders approve merger with American

A US Airways plane (R) taxis for takeoff past an American Airlines plane at the Ronald Reagan Washington National Airport in Arlington Count
A US Airways plane (R) taxis for takeoff past an American Airlines plane at the Ronald Reagan Washington National Airport in Arlington Count

(Reuters) - US Airways Group Inc shareholders approved the carrier's plan to merge with AMR Corp's American Airlines, clearing another hurdle to the deal that would create the world's largest carrier.

Of nearly 132.8 million shares voted, 132.3 million were in favor of the merger, the company announced on Friday after its annual meeting in New York.

US Airways said 257,757 shares were cast against the merger, and 256,523 abstained.

The $11 billion merger deal was announced in February and the companies expect to complete it by the end of September. The new American Airlines will be based in Dallas-Fort Worth.

The merger must still be approved by antitrust regulators. The U.S. Justice Department, along with attorneys general from 19 states, is considering whether the merger would harm competition. Some states involved in the probe worry that they could lose an airline hub because of the transaction. Others are concerned about potential curbs to service in smaller cities, sources have said.

RIVALS SEEK SLOT DIVESTITURES

US Airways Chief Executive Doug Parker told the shareholder meeting on Friday that rivals such as JetBlue Airways and Southwest Airlines were pushing hard to influence regulators to require the merged carrier to shed takeoff and landing rights, especially at Reagan National Airport just outside Washington, D.C. That airport has been a focal point of the regulatory probe of the merger .

Parker, who will be CEO of the new American Airlines, added that should the combined carrier be required to give up such slots at Reagan National, it would be forced to cut service to small cities.

"We will as stewards of our shareholders' resources divest those (slots) that are the least lucrative, and that flying is going to be to small communities," Parker said during the annual meeting, which was broadcast over the Internet.

Parker said the share of slots that the new American would have at Reagan National would be about 67 percent, a figure that trails the share of key rivals at other major U.S. airports.

For example, he said Delta Air Lines , which bought Northwest Airlines in 2008, has a 78 percent share of slots at Atlanta's airport and an 83 percent share in Detroit.

"We don't see any reason certainly from a matter of law perspective that we should be asked to divest by the Department of Justice," Parker said.

In May, 104 members of Congress asked U.S. regulators to allow American and US Airways to keep all their slots at Reagan National in the merger. In a letter to the U.S. Transportation and Justice departments, the lawmakers argued that requiring divestitures would cut service to smaller cities such as Bangor and Portland, Maine.

Reagan National is used regularly by members of Congress to fly to and from their home districts.

Southwest and JetBlue did not immediately respond to requests for comment.

The American-US Airways merger would be the fourth major U.S. industry tie-up since Delta's 2008 acquisition. United Airlines and Continental merged in 2010, and Southwest bought discount rival AirTran in 2011.

About 50 airport workers participated in a protest outside the US Airways annual meeting that was organized by the Service Employees International Union, complaining about low pay and benefits.

Shares of US Airways were up 2.4 percent to $17.78 in afternoon trading, while AMR was up 2.9 percent to $4.99.

(Reporting by Karen Jacobs in Atlanta, additional reporting by Mike Segar in New York; Editing by Gerald E. McCormick and Andrew Hay)

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