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Justice Department Files Suit to Block American/US Airways Merger

American US Air Merger

The Justice Department, along with the attorneys general of six states, filed a lawsuit Tuesday morning to block the American Airlines/US Airways merger.

According to the lawsuit, the merger would violate antitrust laws by dampening competition and leading to higher airfares for consumers.

Upon news of the announcement, both US Airways and American stock prices immediately fell by 10% and 35%, respectively.

The new American was set to become the world’s largest airline, with a fleet of 900 planes operating 3,200 daily flights.

American has a bankruptcy hearing this Thursday, where a judge was set to confirm the company’s reorganization plans, including the merger.

Neither airline has yet commented on the lawsuit.

To read what other FT’ers have to say about the merger, check out this thread.

 

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9 Comments
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chinatraderjmr August 14, 2013

As I mentioned before - a day late and a dollar short. Where was the DOJ when UA & CO announced the mess they called a “merger of equals” Its too bad the DOJ has no hope of blocking this merger. It would have been nice to have SIX competing airlines instead of the upcoming cartel of THREE. They see hat a mess the UA/CO merger is, they see less service and smaller "hubs" disappearing from both DL and UA so obviously, they need to do something about the AA/US merger but they cant block it forever. You cant say yes to DL, yes to CO and then no to US but hopefully, at the very least there will be some oversight on this merger (which was lacking in the last two)

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oneworld82 August 14, 2013

The DOJ has made a big mistake with this call. If AA eventually fails, not only will prices rise but there will be a huge loss of jobs. And fares will keep on rising no matter what.

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edgewood49 August 13, 2013

Maybe now AA will turn it's attention to AS

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Ducati August 13, 2013

@Cathay Boy How about trying to sound a bit less angry and more civil. Name calling doesn't help you and your argument. Try typing Attorney General Holder...

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zerolife August 13, 2013

Also the last merger between United and Continental sure didn't help with lowering the prices or improving quality of service. I don't think we can expect this merger to be any different.