European watchdog approves US Airways, AMR merger

AMSTERDAM - The European Union's Commission has cleared US Airways' proposed merger with American Airlines parent AMR Corp. -- on the condition that they give up one slot at London's Heathrow airport and take steps to foster competition on the London-Philadelphia route.

The merger and restructuring plan must still be approved by a U.S. federal judge before AMR can emerge from bankruptcy, and the U.S. Department of Justice is still reviewing the deal amid complaints that it could lead to reduced competition and higher fares.

Commission Vice President in charge of competition policy Joaquin Almunia said in a statement the Philadelphia route would have been monopolized without concessions agreed to provisionally by the two airlines. Investigators were satisfied there would still be strong competition on other transatlantic routes affected by the merger.

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