Antitrust Suit Filed To Stop Airline Merger
The U.S. Department of Justice filed a civil antitrust lawsuit on Tuesday to challenge the proposed $11 billion merger between US Airways and American Airlines. The suit claims the merger, which would result in the creation of the world’s largest airline, would substantially lessen competition for commercial air travel in the U.S. and would result in higher airfares and less service for passengers. “Airline travel is vital to millions of American consumers who fly regularly for either business or pleasure,” said Atty. Gen. Eric Holder, in a news release. “By challenging this merger, the Department of Justice is saying that the American people deserve better." In recent years, major airlines have raised fares, imposed new and higher fees and reduced service, the Justice Department said. The airlines had announced their merger plans in February.
The stock market responded quickly to news of Tuesday's lawsuit, with shares of US Airways falling sharply, according to The Wall Street Journal. Neither airline has yet released any comment on the lawsuit. In February, the airlines said their merger would create more competition among the large airlines, which would benefit travelers. The proposed merged airline, the "new American Airlines," would be headquartered in Dallas/Fort Worth. It would be "a highly competitive alternative for consumers to other global carriers," according to a recent US Airways news release, with more than 6,700 daily flights to 336 destinations in 56 countries. Together, American Airlines and US Airways would operate a fleet of almost 950 aircraft and employ more than 100,000 staffers worldwide.