The US Justice Department, the District of Colombia and six states have joined forces to block the mega-merger of American Airlines and US Airways, which would have created the world’s biggest carrier.
The Justice Department said it would be a bad deal for the American consumer, leading to higher prices and less choice and competition. The merged company would, for example, control 69 percent of flights out of Washington.
The deal, worth over 8.25 billion euros, was announced in February and immediately attracted flak, but after ceding landing and takeoff slots in London and Philadelphia the EU granted approval.
Both companies’ shares fell on the news.
They could be in for a long and bruising courtroom battle against seasoned lawyers if they choose to keep fighting.
Several experts in competition law say that the aggressive stance taken by the Justice Department in the suit it filed in US District Court in Washington signals a sincere intention to block the deal, not just a mere negotiating ploy to get concessions before possible future approval.