Justice Dept. Files Lawsuit to Block US Airways-American Merger

[onehandle]

Source: New York Times



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

The $11 billion deal, announced in February, took American out of bankruptcy. It would create the nation’s biggest airline, a company with the size and breadth to compete against United Airlines and Delta Air Lines, which have grown through mergers of their own in recent years and are currently the biggest domestic carriers.

But in the complaint filed Tuesday in Federal District Court in the District of Columbia, the Justice Department said that the merger “will leave three very similar legacy airlines — Delta, United and the new American — that past experience shows increasingly prefer tacit coordination over full-throated competition.”

The complaint goes on, “By further reducing the number of legacy airlines and aligning the economic incentives of those that remain, the merger of US Airways and American would make it easier for the remaining airlines to cooperate, rather than compete, on price and service.”


Read more: http://dealbook.nytimes.com/2013/08/13/u-s-seeks-to-block-airline-merger

[BumRushDaShow]

1. CNN has a story up now

DOJ tries to block American-US Airways merger
By CNN Staff
updated 10:53 AM EDT, Tue August 13, 2013

(CNN) -- The federal government and other officials are trying to block a planned merger of American Airlines and US Airways -- a union that could create the world's largest airline.

The U.S. Justice Department and attorneys general for six states and the District of Columbia on Tuesday filed a civil antitrust lawsuit challenging the proposed $11 billion merger between US Airways Group Inc. and American Airlines' parent corporation, AMR Corp.

The merger "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 Justice Department said in a news release.

US Airways agreed to buy American parent AMR in February. AMR filed for bankruptcy in November 2011, and it was expected to emerge from bankruptcy once the merger was ready to close.

CNN's Evan Perez and CNNMoney's Chris Isidore contributed to this report.


http://www.cnn.com/2013/08/13/us/airline-merger-antitrust-lawsuit/index.html

I got the NYT alert too.

[dbackjon]

2. Good. They should have blocked the Delta-NW merger

[mc51tc]

3. Six states join the DOJ lawsuit

Surprising! This DOJ action along with 6 other states appears to be huge, unexpected news.

"The two states that hold the headquarters of American Airlines and US Airways – Texas and Arizona – are joning Florida, Pennsylvania, Tennessee, Virginia, the District of Columbia and the U.S. Department of Justice in seeking to block the two carriers’ merger.

Pennsylvania also has a US Airways hub in Philadelphia, while Florida holds American Airlines’ Miami hub. Virginia is home to Ronald Reagan Washington National Airport, where US Airways had more than 55 percent of the takeoff and landing rights."

http://aviationblog.dallasnews.com/2013/08/justice-department-files-suit-to-block-the-us-airways-american-airlines-merger.html/