The U.S. Department of Justice (DOJ) and six state attorneys general filed suit today in federal court challenging the merger of US Airways Group Inc. and AMR Corp., American Airlines’ parent company. The DOJ says the combined company would reduce competition and result in higher fares for American travelers.
“By challenging this merger, the Department of Justice is saying that the American people deserve better,” said U.S. Attorney General Eric Holder in a statement. “This transaction would result in consumers paying the price—in higher airfares, higher fees and fewer choices.”
The government says American Airlines and US Airways directly compete on more than 1,000 routes where one or both offer connecting service. It further claims that the proposed merger would result in four airlines controlling more than 80 percent of the U.S. commercial market.
The deal would have allowed American Airlines to exit bankruptcy after AMR Corp. initially filed for bankruptcy protection back in late 2011. Six other unprofitable U.S. airlines merged with larger companies over the past five years according to Bloomberg, but none of those mergers resulted in an antitrust suit.
And American Airlines has been in the news a lot on InsideCounsel, including: