Antitrust Regulators Sue to Block $11 Billion Airline Merger

U.S. Department of Justice, and attorneys general for six states and the District of Columbia sued to block the $11 billion merger of U.S. Airways and American Airlines, potentially disrupting a deal that shareholders, creditors, and European officials have already approved.  The DOJ and the attorneys general claim the merger would create the world’s largest airline by passenger volume and would curb competition in key U.S. hubs, such as Washington’s Reagan National Airport, and lead to higher fares.  Although only 13 of American and U.S. Airways’ routes compete on direct service, and many hubs support the idea of an airline with more consumer options, Reagan National is one of the trouble spots.  According to the DOJ, the potential merged airline would control 69 percent of takeoff and landing slots at Reagan National, which would give it a virtual stranglehold on service to and from that airport.

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