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US, States Challenge Proposed Airline Merger [VIDEO]

The Justice Department and a number of U.S. state attorneys general are challenging the proposed $11 billion merger between US Airways Group Inc. and American Airlines’ parent company, AMR Corp.

American Airlines plane
American Airlines plane (Joe Raedle/Getty Images)

The Justice Department says the merger would result in the creation of the world’s largest airline. The government says a combination of the two companies would reduce competition for commercial air travel in local markets and would result in passengers paying higher airfares and receive less service.

A lawsuit filed in federal court in Washington, D.C., seeks to prevent the companies from making the deal in order to preserve head-to-head competition.

A spokesman for US Airways had no immediate comment. American Airlines did not immediately return a call seeking comment.

(Copyright 2013 The Associated Press. All Rights Reserved)

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