Huffpost Business

American Airlines, US Airways Sued In Attempt To Block Merger

Posted: Updated:
AMERICAN AIRLINES US AIRWAYS
A US Airways tail rest on the tarmac near an American Airlines plane at Ronald Reagan Washington National Airport in Arlington, Virginia on April 23, 2012. (Photo credit should read JIM WATSON/AFP/Getty Images) | Getty

DALLAS -- Opponents of the proposed merger of American Airlines and US Airways filed a lawsuit Tuesday to block the deal, claiming it would hurt consumers by driving up airfares.

The suit was filed in federal district court in San Francisco by antitrust lawyer Joseph Alioto, on behalf of nearly 40 consumers.

Alioto argued that the merger would lead to fewer flights, reduced service to small cities, and a lower quality of service overall. He said the merger would leave four airlines – United, Delta, Southwest and the post-merger American – controlling about 90 percent of the domestic airline industry, leading to higher prices.

American Airlines spokesman Mike Trevino called the lawsuit "baseless." He said the merger would combine two airlines with little overlap in their routes, give customers more destinations, and is not expected to result in the closure of hub airports currently operated by American and US Airways.

US Airways spokesman Ed Stewart said the lawsuit lacked merit. "As is often the case with high-profile mergers, lawsuits containing baseless allegations such as these are filed and they are successfully defended," he said.

Alioto's law firm has filed lawsuits to block previous airline mergers, including Southwest Airlines Co.'s acquisition of AirTran Airways. In that case, a federal appeals court this year ordered Alioto's firm to pay $67,495 of the carriers' court costs, noting that the lawsuit was filed the day after their deal was completed.

The U.S. Justice Department is reviewing the proposed merger, which would make American the world's biggest airline. The attorneys general of 19 states, led by Texas, have joined that review, meaning that state officials will be able to take part in meetings and witness depositions.

Members of Congress have raised concern that after a merger, American and US Airways Group Inc. would be too dominant at Reagan National Airport outside Washington, D.C. The airlines, however, have resisted suggestions that they should sell some of their takeoff and landing slots at Reagan to other carriers, in order to increase competition.

Trevino said American, part of AMR Corp., was continuing to work with the Justice Department and looked forward to closing the merger, which is expected in the third quarter.

Also on HuffPost:

Close
10 Best States To Sue A Company
of
Share
Tweet
Advertisement
Share this
close
Current Slide

Suggest a correction

Around the Web

Opponents suing proposed merger of American Airlines and US ...

Critics sue to block American-US Airways merger - Las Vegas Sun ...

Critics sue to block American-US Airways merger | KSTP TV ...

Critics sue to block American-US Airways merger | KING5.com Seattle

Opponents suing proposed merger of American Airlines and US Airways

CNN Washington AM Note

Consumers Say AMR - US Airways Merger Cripples Competition

Saga of the saggy pants: Man files complaint against US Airways for alleged ...