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Justice Dept. sues to block American Airlines-US Airways merger

Justice Dept. sues to block American Airlines-US Airways merger

The Justice Department sued to block the merger of American Airlines and US Airways. Photo: Reuters

WASHINGTON (Reuters) – The Justice Department sued on Tuesday to block the merger of American Airlines’ parent company AMR Corp and US Airways Group Inc, saying the deal would hurt consumers by leading to higher fares and fees.

The $11 billion merger would create the world’s largest airline. The civil antitrust lawsuit was filed in U.S. District Court for the District of Columbia.

The Justice Department was joined in its suit by several states, among them Arizona and Texas.

“The department sued to block this merger because it would eliminate competition between US Airways and American and put consumers at risk of higher prices and reduced service,” Bill Baer, head of the Justice Department Antitrust Division, said in a statement.

“Both airlines have stated they can succeed on a standalone basis, and consumers deserve the benefit of that continuing competitive dynamic,” Baer said.

AMR and US Airways did not immediately respond to requests for comment on the suit.

The two airlines secured European Union approval for the proposed merger on August 5 after promising to surrender slots at two airports, London’s Heathrow and Philadelphia in the United States.

The Justice Department said it was concerned that if the merger went through, four airlines would control more than 80 percent of the U.S. commercial air travel market.

Reagan National Airport in Arlington, Virginia, the facility closest to Washington, would see especially high concentration as the combined company would control 69 percent of the take-off and landing slots, the department said.

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