DOJ Stands Up At Wedding Of American Airlines & US Airways Yelling “I Object!”



It’s been a long wait for lovebirds American Airlines and US Airways, and we’re basically at the point where the betrothed couple is standing up in front of friends and family, waiting to see if anyone will heed the call of the officiant asking if there’s any reason these two shouldn’t be wed. Enter the United States Justice Department, arriving at the ceremony in a way more timely manner than [SPOILER ALERT] Dustin Hoffman in The Graduate but still just as opposed to the nuptials.

The DOJ filed an antitrust lawsuit today in U.S. District court for the District of Columbia to stop the merger of AMR Corp (parent company of American) and US Airways, saying if this thing goes through it’ll hurt consumers by way of higher fares and fees, reports Reuters.

If the union commences, it’d result in the world’s largest airline, worth $11 billion. Several states joined in the suing party, effectively yelling “I OBJECT!” or whatever it is you shout at a wedding when you don’t want it to happen.

“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.”

Although the merger was already approved by the European Union this month, it appears that the union is hitting a bit to close to home for the DOJ. It said it was worried that after the wedding, only four airlines would control more than 80% of the U.S. commercial air travel market.

Consumers Union, the policy and advocacy division of Consumer Reports, previously raised reservations about the deal’s potential impact on consumers. Last March, the group told the Senate in testimony that the merger would hinder, rather than enhance consumers’ airline options.

William J. McGee, travel and aviation consultant for Consumers Union, said, “We have continually expressed concerns about the implications that a merger of this scale – the fifth among major network airlines since 2001 – would have on consumers. This suit shows that the Department of Justice shares these concerns. A combined American/US Airways could mean fewer flights and fewer choices for consumers, coupled with higher fares and lower quality of service. Even more so, further consolidation in the airline industry could make it even harder for low-cost alternatives to compete effectively, and take the biggest airlines further into ‘too-big-to-fail’ territory. We are pleased that the Justice Department and these states have taken action today to protect consumers.”

Thus far the airlines haven’t responded to the suit, but we’ll be sure to update you all when and if they do.

U.S. sues to block AMR-US Airways merger [Reuters]

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