In efforts to keep you up to date with the American Airlines and US Airway merger, TravelPlex learned yesterday of an antitrust suit filed by the U.S. Department of Justice as well as attorney generals of six other states. The basic crux of the suit is the fact that the merger will leave only three “legacy” carriers, Delta Airlines, United Airlines and American Airlines. This will result in decreased competition and increased fares for consumers.
DOJ Files Suit To Block AA-US Airways Merger
By David Jonas of Business Travel News
The U.S. Department of Justice on Tuesday filed an antitrust suit challenging the proposed merger of American Airlines and US Airways. DOJ joined with several state attorneys general to prevent the tie-up after determining it would "substantially lessen competition for commercial air travel in local markets throughout the United States and result in passengers paying higher airfares and receiving less service." The suit at least complicates and could delay AA's emergence from bankruptcy protection. AA and US Airways unsurprisingly responded to the suit by announcing their intention "to mount a vigorous and strong defense."
DOJ said it seeks to "preserve the existing head-to-head competition" on thousands of routes (connecting and/or nonstop) on which the two carriers currently compete, and minimize "the incentive and ability" of U.S. carriers to coordinate fare hikes and raise ancillary fees.
Based partly on comments from the carriers' own executives, DOJ also asserted that American and US Airways each are well-positioned to succeed on a standalone basis.