US sues to block airline merger

9:33 am | August 14, 2013

 

MERGER LAWSUIT: The U.S. Justice Department and six states (Texas, Arizona, Florida, Pennsylvania, Virginia and Tennessee plus the District of Columbia) filed a civil lawsuit Tuesday to stop the proposed merger of American Airlines and US Airways, saying it would hurt competition and lead to higher prices for consumers.

WHAT’S NEXT: The airlines said they will fight the government in court. The merger is part of American’s plan to emerge from bankruptcy protection, which could be delayed for several months.

DEAL DEAD? Not at all, although it doesn’t look so inevitable anymore. The Justice Department didn’t rule out a settlement. In 2009, the government dropped an antitrust lawsuit against Whole Foods Market Inc. when the company agreed to sell some stores after acquiring a rival grocery chain.

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