Connect to share and comment

US government seeks to block $11-billion American Airlines, US Airways merger

The US Justice Department filed a lawsuit to stop the merger on Tuesday, a week after European authorities approved the deal.

Us airways planeEnlarge
A US Airways jet takes off at Ronald Reagan Washington National Airport on August 13, 2013 in Arlington, Virginia. (Win McNamee/Getty Images)

The US government wants to block the proposed $11 billion merger between US Airways and American Airways, which would leave just four airlines in control of 80 percent of the US air travel market following a wave of industry consolidation.

The Justice Department and attorneys general from half a dozen states and the District of Columbia filed a lawsuit on Tuesday, arguing the hookup would hurt consumers by leading to higher airfares and less service.

"The department sued to block this merger because it would eliminate competition between US Airways and American and put consumers at risk of higher prices and reduced service," Bill Baer, head of the Justice Department Antitrust Division, said in a statement.

"Both airlines have stated they can succeed on a standalone basis, and consumers deserve the benefit of that continuing competitive dynamic."

US Airways and American Airlines said they planned to mount a “vigorous and strong defense” of their deal, which they argued was in the interests of consumers.

“Integrating the complementary networks of American and US Airways to benefit passengers is the motivation for bringing these airlines together. Blocking this pro-competitive merger will deny customers access to a broader airline network that gives them more choices,” the companies said in a joint statement.

The lawsuit comes a week after European authorities approved the tie-up, which was first announced in February.

More from GlobalPost: American Airlines, US Airways announce merger

http://www.globalpost.com/dispatch/news/regions/americas/united-states/130813/us-government-justice-department-american-airlines-us-airways-merger