DOJ Blocks AA-US Merger With Anti-Trust Lawsuit

The US Department of Justice (DOJ) has filed a civil anti-trust lawsuit against American Airlines (AA) and US Airways blocking their proposed merger. The DOJ, along with six state attorney generals and the District of Columbia, is opposing the $11bn merger on the grounds that it would dissolve competition and increase ticket prices. The DOJ claims that the pair currently compete on routes worth about $2bn in annual revenue and that eliminating this competition would allow them to raise fares. It argues that the merged airline, which would be the biggest in the world, would hold 80 per cent of the US commercial air travel market. In particular, Reagan National airport would suffer a 63 per cent monopoly held by the airlines. The opposing attorney generals working with the DOJ represent Texas, where American Airlines is headquartered; Arizona, where US Airways is headquartered; Florida; Columbia; Pennsylvania; Tennessee; and Virginia.

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