DOJ Sues to Stop US Airways-American Airlines Merger

The Department of Justice, along with attorneys general from six states and the District of Columbia, is challenging a merger that would create the world's largest airline, the Department of Justice announced today.

The group filed an antitrust lawsuit opposing the $11 billion merger of US Airways Group (NYSE: LCC  ) and AMR Corp. (UNKNOWN: AAMRQ.DL  ) , the parent company of American Airlines, on the grounds that 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," according to the DOJ statement.

The attorneys general represent the states of Texas, the headquarters of American Airlines; Arizona, the headquarters of US Airways; Florida; Pennsylvania; Tennessee; Virginia; and D.C.

U.S. Attorney General Eric Holder said in the statement, "By challenging this merger, the Department of Justice is saying that the American people deserve better. This transaction would result in consumers paying the price -- in higher airfares, higher fees and fewer choices."

The DOJ said the merger would result in only four airlines controlling more than 80% of the U.S. commercial air travel market.

Passengers using Washington Reagan National Airport would be particularly affected by the merger, the DOJ said. The merged airline would control 69% of the take-off and landing slots and "would have a monopoly on 63% of the nonstop routes served out of Reagan National airport." The Justice Department had been expected to pressure American and US Airways into giving up some takeoff and landing slots at Reagan National Airport.

Last week, the merger was approved by the European Commission.

The Associated Press reports that a spokesman for US Airways Group Inc. had no immediate comment and that AMR Corp. did not immediately return messages seeking comment. Shares of both companies plunged, and other airline shares fell sharply as well.

AMR and US Airways officials had said their merger would help consumers by creating a tougher competitor for United and Delta.

-- Material from The Associated Press was used in this report.

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  • Report this Comment On August 13, 2013, at 3:06 PM, JOberman wrote:

    The major reason these two airlines want to consolidate is to LAY OFF their employees! It is FALSE for the airlines to declare the consumer will benefit in lower costs towards their airline tickets. JP4 Jet Fuel (104 Octane) costs between $6 to 7 dollars per gallon and the consumer pays for ALL of it in their purchased airline ticket cost.

    Millions of workers wouldn't be unemployed if new federal labor laws were enacted to protect them from unscrupulous employers, who practice fraudulent lay offs to reduce their employee's wages up to as much as 50 percent.

    Democrat & Republican politicians have failed the working class by rescinding or amending employee state labor laws which allows BIG Businesses to greatly benefit from reduced employee protection due the working class for medical, sick, vacation, holidays and wage benefits. Big Businesses will eliminate a department by reclassifying it with a new department or job title and then lay off to force an already member of their company to reapply for the same job with a falsely claimed lay off, this is fraudulent. Politicians from both parties can enact laws to protect employee(s) from an illegally unjustified lay off. Shame on both political parties for allowing BIG Businesses to reduce wages in this manner. The term lay off should only apply if the job NO longer exists and not by reclassification of a department or job title.

    Hence, these false lay off should have politicians up in arms and cause them to enact a new federal labor law making it FRAUDULENT, a CRIME and ILLEGAL to falsely eliminate a job or department title and offer a reclassified job as the same job, even if they add one or several new job requirements, the job is overall the same. Our labor laws sorely need upgrading and a new federal labor law enacted to PROTECT every employee from fraudulent lay offs practiced by unscrupulous employers. In addition to this new labor law... Employers can not require employee(s) to reapply for the 'same work' reclassified job or re-titled department, since they are already an employee of said company. Companies must offer them the new job without lay offs or lost scaled wages earned by a seniority employee(s). There is something seriously wrong with our politicians... politicians who side with unscrupulous big businesses that practice laying off their employees falsely without just cause. Politicians have become as corrupt as their unscrupulous business friends, who have perfected this fraudulent wage reduction method against NON-UNION employees.

    State & town politicians CAN NOT themselves reclassify their UNIONIZED Police, Fire & Public Works Department or its job titles and lay off their employees only later to inform them they have to reapply for the same jobs under a new department or job title. There is no equal or FAIR JUSTICE from our political system to penalize employers, because a fair employee labor law would penalize (themselves) state & town governments. Just ask Detroit's politicians were all the money went. Let's see... Park Dept employees get $23 dollars per hour to sit on a riding mower and cut Park grass all day long, Police get $48 plus dollars per hour to direct traffic at a road job on their off duty hours and fire fighters get $32 dollars per hour lounging around in the fire house while waiting for a fire call. I personally know a few fire fighters who work the night shift and can play 18 holes of golf the next morning. Tax rates, health care costs, gasoline, electricity, water, food, rent... continue to go higher for the lower middle & poor workers.

    Meanwhile, BIG Businesses are allowed by FEDERAL & STATE politicians to continue to perfect their employee wage reduction method. Shame on corrupt politicians who have allowed BIG Business to conduct themselves in this shameful wage reduction method.

    “By far the most dangerous foe we have to fight is apathy - indifference from whatever cause, not from a lack of knowledge, but from carelessness, from absorption in other pursuits, from a contempt bred of self satisfaction” --William Osler

    Keep watching your sports, continue with your picnics, cook outs and enjoy your vacations wealthy people... while the economy slowly returns to pre-2009 results in the following years!

    The difference between wealthy and lower middle class workers is that lower middle class workers aren't scheming ways to keep wages lower for the wealthy class of working people.

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