AA/US Airways Merger Blocked by DOJ

The Department of Justice has filed an antitrust suit to block the merger of US Airways and American Airlines.

“There is no reason to accept the likely anticompetitive consequences of this merger,” Assistant Attorney General William Baer wrote in the suit, which claims that the proposed merger would allow the airlines to more easily raise prices and impose new or higher baggage and ancillary fees as well as reduce capacity and service.

AMR Corporation, the parent company of American Airlines, Inc. and US Airways Group, Inc., says it intends to mount a vigorous defense to the DOJ’s effort to block the merger.

A statement from American Airlines claimed that "...the DOJ is wrong in its assessment of our merger. Integrating the complementary networks of American and US Airways to benefit passengers is the motivation for bringing these airlines together. Blocking this pro-competitive merger will deny customers access to a broader airline network that gives them more choices.”

The merger is the key piece in a reorganization plan that AMR Corporation is set to present at a bankruptcy court confirmation hearing that is scheduled to begin on August 15. As of press time, that hearing is still scheduled.