Department of Justice Challenges US Airways, American Airlines M - ABC 33/40 - Birmingham News, Weather, Sports

Department of Justice Challenges US Airways, American Airlines Merger

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Justice Department officials and a number of U.S. state attorneys general are challenging the merger between US Airways and American Airlines.

On Tuesday, the Justice Department stated the merger would result in the creation of the "world's largest airline." The merger would bring together US Airways Group Inc. and American Airlines' parent company, AMR Corp., for a proposed $11 billion.

Government officials added that the combination of the two airways would reduce competition for commercial air travel in local markets. It would also result in passengers paying higher airfares and less service to certain airports and cities, according to a source.

Just before noon Tuesday, the Tulsa Regional Chamber provided this commentary on the Department of Justice's challenge:

"The Tulsa Regional Chamber remains supportive of the American Airlines and US Airways merger. We are confident US Airway's decision to merge with American Airlines, a longstanding corporate partner in Tulsa, will keep thousands of high-paying aerospace and manufacturing jobs here in our community."

And on Tuesday morning, shares for US Airways were off nearly 9 percent. This is after shares have quadrupled since late 2011, when AMR filed for bankruptcy and US Airways began to pursue a merger.

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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