THE proposed merger between American Airlines and US Airways has run into turbulence.
The New York Times reported that the US Justice Department had filed a lawsuit to thwart proceedings, the outcome of which would have been the world’s largest airlines.
The Department was reported by the paper as pointing out that domestic routes were already highly concentrated, and the successful merger of the two heavyweights would put some 80 per cent of the US’ air travel market in the hands of just four airlines.
As such, the merger would hurt consumers and result in less competition, higher airfares and less service to many airports, it said.
However, a joint statement indicated that the two airlines were not ready to throw in the towel.
The carriers said they would mount a “vigorous and strong defence” and that contrary to the Justice Department’s understanding, a combined airline would be able to give consumers more options than either airline would be able to on their own.
News of the proposed merger first came to light early this year (TTG Asia e-Daily, February 15, 2013) as part of American Airlines’ plans to exit bankruptcy.
