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Government, states challenge proposed airline merger

3 years 9 months 1 week ago August 13, 2013 Aug 13, 2013 Tuesday, August 13 2013 August 13, 2013 11:00 AM in News
Source: Associated Press

WASHINGTON - Attorney General Eric Holder says a merger between US Airways and the parent company of American Airlines would bring "higher airfares, higher fees and fewer choices."

The Justice Department is joining with attorneys general from a half-dozen states in challenging the proposed $11 billion merger between the two. A lawsuit filed in federal court in Washington seeks to block the companies from making the deal.

There's no comment yet from either airline. On Wall Street, shares of both companies have plunged, along with other airline shares.

The Justice Department had been expected to pressure American and US Airways to give up some takeoff and landing slots at Reagan National Airport outside Washington, where a merger would make them the dominant carrier. Instead, the government is arguing that the merger would hurt consumers around the country by eliminating a competitor on many routes.

The department says if the merger brings even small increases in ticket prices or airline fees, it would cost American consumers hundreds of millions of dollars a year.

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