Newscast Media WASHINGTON—American Airlines and US Airways have merged,
creating the world’s largest carrier and overcoming concerns the deal would hurt
consumers. An antitrust lawsuit had stalled the merger in August.
AMR Corporation – the former parent of American Airlines – and US Airways Group
announced in a statement on Monday they had completed the deal after AMR
emerged from bankruptcy protection. The goliath new American Airlines Group will
provide nearly 6,700 daily flights to more than 300 destinations in 50 countries.
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Newscast Media WASHINGTON—The Department of Justice (DOJ) filed a lawsuit today, blocking the merger between US Airlines Group and American Airlines, on grounds that it violates antitrust laws.
The lawsuit was filed in federal court in Washington D.C. against the airlines, saying this merger—by creating the world’s largest airline—would, in the words of US Airways’ management, “finish[ ] industry evolution.” It would reduce the number of major domestic airlines from five to four, and the number of “legacy” airlines—today, Delta, United, American, and US Airways—from four to three. In so doing, it threatens substantial harm to consumers.
The DOJ quoted US Airlines CEO in the complaint and noted that since 2005, there has been a wave of consolidation in the industry. US Airways has cheered these successive mergers, with its CEO stating in 2011 that “fewer airlines” is a “good thing.”
With fewer airlines, the newly-merged US Airlines and American could then have a monopoly on prices, because it would result in eliminating significant competition and causing consumers to pay hundreds of millions of dollars more.