DOJ sues to stop airline merger

The Department of Justice, along with a number of state attorneys general, filed a lawsuit Tuesday to block the U.S. Airways-American Airlines merger, which would have created the largest airline in the world.

The proposed $11 billion merger, first announced in February, would lessen competition in local markets in the U.S. and also result in higher airfares, according to a statement released by the department.

"Airline travel is vital to millions of American consumers who fly regularly for either business or pleasure," Attorney General Eric Holder said in a press release. "This transaction would result in consumers paying the price -- in higher airfares, higher fees and fewer choices."

The two airlines competed head-to-head on more than 1,000 routes, according to the department, so the new company would remove competition in those markets. The department's statement also noted that the US airline industry is already "highly concentrated’’ and that after the merger four airlines would control more than 80 percent of the commercial air travel market.

The antitrust challenge would prevent the merger as American Airlines and its parent, AMR Corp., exited bankruptcy restructuring. The proposed combined company had planned an estimated 6,700 daily flights with an annual revenue of roughly $40 billion.

If the deal is ultimately approved, the four biggest U.S. airlines -- American, United, Delta and Southwest -- would all be the products of mergers that began in 2008. Those deals have helped the industry control seats, push fares higher and return to profitability.

Last year, business and leisure airline travelers spent more than $70 billion on airfare for travel throughout the United States.

American parent AMR Corp. has cut costs and debt since it filed for bankruptcy protection in late 2011. Pilots from both airlines have agreed on steps that should make it easier to combine their groups under a single labor contract, a big hurdle in many airline mergers.

The attorneys general who joined the legal challenge were from Arizona, Florida, Pennsylvania, Tennessee, Texas, Virginia and Washington, D.C.

Al Jazeera and wires