Gov't, States Challenge Proposed Airline Merger; Airlines Fight

By: Associated Press Email
By: Associated Press Email

WASHINGTON (AP) - US Airways and American Airlines say they will use "all legal options" to fight back against a challenge to their merger plans.

The Justice Department today joined a half dozen states in filing a lawsuit to block the merger in federal court in Washington. The government says the merger will cause "substantial harm" to consumers by leading to higher fares and fees.

The two airlines say the government's conclusions are wrong. In a statement, they say they would create a stronger network of flights that would give travelers more choices.

Analysts say the Justice Department could be looking for more time and leverage to squeeze out some concessions. Many experts had expected regulators to push American and US Airways into giving up some takeoff and landing slots at Reagan National Airport outside Washington, allowing for new competitors there.

Consumer advocates are welcoming the lawsuit. Charlie Leocha, who heads the Consumer Travel Alliance, says it's "the best news that consumers could possibly have gotten."

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WASHINGTON (AP) - The Justice Department and a number of state attorneys general are challenging the proposed $11 billion merger between US Airways Group Inc. and American Airlines' parent company, AMR Corp.

The Justice Department says the merger would result in the creation of the world's largest airline. The government says a combination of the two companies would reduce competition for commercial air travel in local markets and would result in passengers paying higher airfares and receive less service.

A lawsuit filed in federal court in Washington, D.C., seeks to prevent the companies from making the deal in order to preserve head-to-head competition.

A spokesman for US Airways had no immediate comment. American Airlines did not immediately return a call seeking comment.


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