Justice asks judge to approve American, US Airways merger

AIRLINES
Justice asks judge
to approve merger

The Justice Department asked a federal judge Monday to approve terms for the merger of American Airlines and US Airways under a settlement reached in November, without making any changes after a mandated public comment period.

Separately, American Airlines announced that as a result of the merger it would end agreements with JetBlue covering joint ticketing, baggage handling and
frequent-flier programs.

The merger settlement requires the combined airline to sell 104 of its time slots at Reagan National Airport, 34 slots at LaGuardia Airport in New York, and gates and ground facilities at five other major airports. Afterward, the new combined airline would have about 55 percent of the limited number of slots at Reagan National, down from 72 percent. American Airlines sold most of the slots it must divest at Reagan National to Southwest, JetBlue and Virgin America.

The Justice Department said in its filing with the court that the settlement would not create a new independent airline or protect the discounted Advantage fares that are likely to end. But it said that “the divestitures will bring the
consumer-friendly policies of the [low-cost carriers] to more travelers across the country.”

Steven Mufson

FEDERAL BUDGET
Bailout bonanza from Fannie and Freddie

Government-owned mortgage financiers Fannie Mae and Freddie Mac could send about $179.2 billion in profit to taxpayers during the next 10 years if the terms of their bailout remain intact, the White House budget office said Monday.

The amount is more than triple the estimated 10-year payments calculated last year in the White House budget proposal.

Fannie Mae and Freddie Mac have operated under federal conservatorship since 2008. They received $187.5 billion in taxpayer funds, but they have returned to profitability, and by the end of March they will have had paid $202.9 billion in dividends to the Treasury.

The projections come in an addendum to President Obama’s fiscal 2015 budget proposal. Last year, the administration estimated that Fannie Mae and Freddie Mac would send Treasury $51 billion through 2023.

Under a 2012 revamp of their bailout terms, Fannie Mae and Freddie Mac send a majority of their profits to Treasury as dividends, and they are unable to repurchase the controlling share the government took when it bailed them out.

— Reuters

ALSO IN BUSINESS

— From news services

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Steven Mufson covers the White House. Since joining The Post, he has covered economics, China, foreign policy and energy.
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