DALLAS – Airports large and small may see some negative credit effects from the planned merger of American Airlines and US Airways Group, Moody’s Investors Service said Thursday, with smaller airports facing the biggest challenges.

The merger is expected to proceed after the two airlines agreed to give up a total of 104 flight slots at New York’s LaGuardia Airport and 34 slots at Washington’s Reagan National Airport in an antitrust settlement with the U.S. Justice Department announced on Tuesday.

The settlement requires the two to divest slots, gates, and ground facilities at seven airports across the county.

“This is credit negative for US airports, particularly for small and non-hub airports,” said Moody’s vice president Earl Heffintrayer, chief analyst on the report.

Airports in Augusta, Ga., and Savannah/Hilton Head that recently gained direct flights to the Washington airport by the merging carriers are at risk of losing that service, Heffintrayer said. That is despite stipulations that Reagan National commuter slots be used to preserve most of the service to small and medium hub airports. 

“Both the Augusta and Savannah airports are close to competing airports that may retain Reagan National direct service,” the report said.

Enplanements will drop at Reagan National because the anti-trust agreement reverses the increased hubbing activity by US Airways that resulted in a 6.2% increase in enplanements over the previous 12 months through August 2012, Moody’s said.

A hearing is set for Nov. 25 in federal bankruptcy court on American Airlines’ request that the merger be allowed.

The merged entity, which will retain the name American Airlines, will also give up two gates each at Boston’s Logan International Airport, Los Angeles International Airport, Chicago O’Hare International Airport, Dallas Love Field, and Miami International Airport.

The loss of the gates is negative to those airports as well, Moody’s said, but “will be manageable because there is robust demand for gates and slots.”

American Airlines also agreed to continue its hubbing activity at historical levels for three years after the merger at Charlotte Douglas International Airport in North Carolina, New York’s John F. Kennedy International Airport, Philadelphia International Airport, and Phoenix Sky Harbor International Airport.

“American Airlines’ assurance about hubbing activity is not credit positive given the long tenure of the debt at each of these facilities, as well as the experience of Memphis-Shelby County Airport Authority, Tenn., which was de-hubbed five years after the Delta Airlines and Northwest Airlines merger and its stated assurances,” Moody’s said.

The hubbing agreement does not extend to Dallas-Fort Worth International Airport, but Moody’s said it expects no passenger declines there as it is the proposed home of the merged airline, the area’s generally favorable weather, and room for expansion.

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