Nightly News   |  November 12, 2013

US Airways-American merger will create world’s biggest airline

When the $17 billion deal is done in December, U.S. Airways and American will offer a combined 6700 daily flights to 336 cities in 56 countries. NBC’s Tom Costello reports.

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>>> for years, american airline 's marketing slogan was something special in the air, and as of today, it is something much more massive in the air, today, the feds approve its merger with u.s. air , making it the largest carrier in the world. today, tom costello has more on what it means for those who sit behind the seats of the pilot.

>> reporter: hi, brian, and to get this merger approval, the two airlines had to agree to give up critical take off and landing slots at some key airports. when the deal is complete in deputy, the $17 billion merger between u.s. airs and american will create the world's biggest airline, multiple flights to 56 country, 80 million passengers each year. but it also means fewer competing for your business. at american airlines hub, travellers were skeptical.

>> i think it usually means that the competition could drive the rates up.

>> i just have a feeling. it always happens, every time there is a merger there is a rate increase.

>> reporter: since 2005 , 25 regional and main line airlines have merged, cutting by at least 10% the total number of airline seats, among the biggest deals, delta and northwest, united and continental, southwest and air tran , a u.s. american merger had the justice department concerned that low cost carriers would be driven out, driving up costs.

>> the concern is not the bigger cities, it is the smaller cities who are likely to take the brunt of the air fare hikes over the next four years.

>> reporter: to get approval, they demanded they surrender slots to other airlines, at reagan international and washington and new york's la guardia . nbc pete williams covers the justice department .

>> the government insists that giving up flights to low cost airlines like jetblue and southwest will lead to more competition and cheaper fares.

>> reporter: today, the ceo said they will have a greater airline, better for our customers and employees. the airlines have agreed to keep their existing hub for at least three years. and the frequent flier programs will eventually merge, which means u.s. airways frequent flier will now eventually join the one world alliance.

>> tom costello just apparently off the runway there at reagan international.