The Justice Department unexpectedly moved to block the merger of American Airlines and US Airways.
The lawsuit they filed Tuesday in U.S. District Court in Washington said the American-US Airways deal would go too far and hurt competition because it would leave four airlines controlling more than 80% of the U.S. market. The federal government said it would cause “substantial harm” to consumers by leading to higher fares and fees.
U.S. Attorney General Eric Holder said in a statement:
This transaction would result in consumers paying the price—in higher airfares, higher fees and fewer choices.
In response, AA and US Airways have said their merger would benefit consumers by building a new airline that could compete with larger rivals. They said the new American would offer passengers a more attractive route network, more flight options and better connections to overseas destinations while improving job security and compensation for employees.
The prospect of an antitrust trial means the merger can’t be completed as planned in the third quarter.
For more details – check out WSJ article
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