Critics Sue To Block Airline Merger
DALLAS (CBSDFW.COM/AP) — American Airlines and US Airways are now facing a lawsuit over their planned merger.
The suit claims the merger will result higher airfares, fewer flights, cuts at hubs, and the firing of thousands of employees.
The suit was filed in federal district court in San Francisco by antitrust lawyer Joseph Alioto, on behalf of nearly 40 consumers.
Alioto said the merger would leave four airlines — United, Delta, Southwest and the post-merger American — controlling about 90 percent of the domestic airline industry, leading to higher prices.
American Airlines spokesman Mike Trevino called the lawsuit "baseless." He said the merger would combine two airlines with little overlap in their routes, give customers more destinations, and is not expected to result in the closure of hub airports currently operated by American and US Airways.
US Airways spokesman Ed Stewart said the lawsuit lacked merit. "As is often the case with high-profile mergers, lawsuits containing baseless allegations such as these are filed and they are successfully defended," he said.
Alioto's law firm has filed lawsuits to block previous airline mergers, including Southwest Airlines Co.'s acquisition of AirTran Airways. In that case, a federal appeals court this year ordered Alioto's firm to pay $67,495 of the carriers' court costs, noting that the lawsuit was filed the day after their deal was completed.
The U.S. Justice Department is reviewing the proposed merger, which would make American the world's biggest airline. The attorneys general of 19 states, led by Texas, have joined that review, meaning that state officials will be able to take part in meetings and witness depositions.
Members of Congress have raised concern that after a merger, American and US Airways Group Inc. would be too dominant at Reagan National Airport outside Washington, D.C. The airlines, however, have resisted suggestions that they should sell some of their takeoff and landing slots at Reagan to other carriers, in order to increase competition.
Trevino said American, part of AMR Corp., was continuing to work with the Justice Department and looked forward to closing the merger, which is expected in the third quarter.
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