The merger between US Airways and American Airlines faces an anti-trust lawsuit filed on Tuesday by the US Justice Department and officials in seven local jurisdictions.
The $ 11 billion merger would create the world’s largest airline, and the Justice Department says the subsequent decrease in competition for flights would result in higher airfares and less service for customers.
“Airline travel is vital to millions of American consumers who fly regularly for either business or pleasure,” Attorney General Eric Holder said. “By challenging this merger, the Department of Justice is saying that the American people deserve better.”
Six states and the US capital, Washington, joined the Justice Department in the legal challenge. The states include Texas, where American Airlines is headquartered, and Arizona, which is home to US Airways.
The airlines said they would “mount a vigorous and strong defence” to the lawsuit.
“We believe that the DOJ is wrong in its assessment of our merger.
Integrating the complementary networks of American Airlines and US Airways to benefit passengers is the motivation for bringing these airlines together,” they said in a statement.
“Blocking this pro-competitive merger will deny customers access to a broader airline network that gives them more choices.” They said the move was the best way to restructure American Airlines from bankruptcy.
The carriers currently compete on more than 1,000 routes and have head-to-head competition on non-stop routes worth $ 2 billion in annual revenue, the Justice Department said.
The airlines announced the merger in February and planned to close the deal in the ongoing third quarter. The deal was designed to provide a way out of bankruptcy for American Airlines.