Justice Dept. & 6 States Challenge Proposed US Air, American Merger

WASHINGTON (AP) – The Justice Department and a number of state attorneys general on Tuesday challenged a proposed $11 billion merger between US Airways Group Inc. and American Airlines’ parent company, AMR Corp.

The Justice Department says the deal would result in the creation of the world’s largest airline and that a combination of the two companies would reduce competition for commercial air travel in local markets and would result in passengers paying higher airfares and receive less service.

The federal government and the state attorneys general filed a lawsuit filed in federal court in Washington, D.C., seeking to prevent the companies from making the deal.

A spokesman for US Airways had no immediate comment. American Airlines did not immediately return a call seeking comment.

In February, the companies disclosed their plans to create a company with 6,700 daily flights and annual revenue of roughly $40 billion.

Were the deal to be approved, the four biggest U.S. airlines – American, United, Delta and Southwest – would all be the products of mergers that began in 2008. Those deals have helped the industry control seats, push fares higher and return to profitability.

On Tuesday, Attorney General Eric Holder said the transaction between US Airways and American would result in “higher airfares, higher fees and fewer choices.”

Last year, business and leisure airline travelers spent more than $70 billion on airfare for travel throughout the United States.

American parent AMR Corp. has cut costs and debt since it filed for bankruptcy protection in late 2011. Pilots from both airlines have agreed on steps that should make it easier to combine their groups under a single labor contract, a big hurdle in many airline mergers.

The attorneys general were from Arizona, Florida, the District of Columbia, Pennsylvania, Tennessee, Texas and Virginia.


More Local News
More Business News

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • http://findit.ws/newsroom/us-airways-promises-vigorous-defense-to-justice-suit-usa-today/ US Airways promises ‘vigorous defense’ to Justice suit – USA TODAY

    […] mergerWinston-Salem JournalUS Challenges Merger of AMR, US AirwaysWall Street JournalWCNC -CBS Local -WBTVall 426 news […]

  • http://syndicate.hop7.net/content-fusion/2013/08/14/us-moves-to-ground-big-air-merger-wall-street-journal/ US Moves to Ground Big Air Merger – Wall Street Journal | Content Fusion

    […] challenge proposed airline mergerWCNCJustice Sues To Block US Airways-American Airlines MergerWBURCBS Local -MyFoxAL -Sky News Australiaall 490 news […]

blog comments powered by Disqus
Bringing You The Best in Sports Talk Radio
Download And Win Today!

Listen Live