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Justice appeals AMR case
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June 26, 2001: 3:03 p.m. ET
Seeks to overturn decision American Airlines didn't force out upstart carriers
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NEW YORK (CNNfn) - In a setback for the world's largest airline company, the Justice Department announced Tuesday it has appealed a decision dismissing its suit charging American Airlines with predatory practices at the Dallas/Fort Worth International Airport.
The suit alleged that American, a unit of AMR Corp. (AMR: up $0.02 to $33.26, Research, Estimates), engaged in the predatory practices to drive low-cost carriers out of its hub at Dallas-Fort Worth. The case was dismissed by a federal District Court in Wichita, Kan., in April.
"American played by the traditional rules," wrote Judge J. Thomas Marten in his April 27 decision. "It competed with the low fare carriers on their own terms. It did not price its fares below cost; it did not undercut the other carriers' fares. There is no doubt that American may be a difficult, vigorous, even brutal competitor. But here, it engaged only in bare, but not brass, knuckle competition. Summary judgment is appropriate."
A statement from American said executives there are confident that the airline will also be cleared by the U.S. Court of Appeals.
"Judge Marten's decision reflected very careful analysis and deliberation of the evidence put forth by both the government and the airline, and overwhelmingly concluded that the Justice Department's legal arguments and strategy were flawed," said the statement. "We believe that the 10th Circuit Court of Appeals will come to the same conclusion."
The case, brought by the Justice Department in 1999, charges American cut prices at its home hub in order to force out upstart carriers such as Vanguard (VNGD: down $0.09 to $1.10, Research, Estimates), SunJet, and Western Pacific.
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Despite the antitrust case pending at the time, in March the Justice Department cleared the purchase of by AMR of bankrupt carrier Trans World Airlines. American and TWA will eventually be merged but are still operating as separate carriers. But the department has yet to approve the proposed purchase of money-losing US Airways Group (U: down $0.08 to $23.27, Research, Estimates) by UAL Corp. (UAL: down $0.10 to $31.90, Research, Estimates), the owner of United Airlines. 
CNN Washington bureau contributed to this report
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