Close
Bonneville Phoenix Network
 KTAR News
 Arizona Sports
92.3 FM KTAR
Menu
Social
Latest News
Updated Aug 22, 2013 - 1:24 pm

Arizona joins challenge of US Air-American merger

PHOENIX -- Arizona has joined a handful of states and the U.S. Department of Justice in an attempt to block the proposed $11 billion merger between US Airways and American Airlines.

In the meantime, US Air CEO Doug Parker said the legal action will prevent the merger from closing in the third quarter of 2013.

State Attorney General Tom Horne said in a release Tuesday, "Competition is crucial for a vital economy. ... This merger is anticompetitive and Arizona consumers will be forced to pay millions of dollars more each year in increased airfare if it goes through as planned."

US Air is based in Tempe.

Parker wrote in a letter to employees released to the media, that the disappointed companies "no longer expect the merger to close during the third quarter of 2013" and that "we are mounting a vigorous and strong defense in federal court against the DOJ's case."

Other states joining the lawsuit, which was filed in federal court the nation's capital, are Florida, Pennsylvania, Tennessee, Texas and Virginia, plus the District of Columbia.

The Justice Department said the deal would result in the creation of the world's largest airline and that a combination of the two companies would reduce competition for commercial air travel in local markets and would result in passengers paying higher airfares and receiving less service.

In February, the companies disclosed their plans to create a company with 6,700 daily flights and annual revenue of roughly $40 billion.

U.S. Attorney General Eric Holder said the transaction between US Airways and American would result in "higher airfares, higher fees and fewer choices."

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

Associated Press contributed to this article.

World Class Arizona

  • APSWorld Class Arizona with Arizona's largest and longest-serving electricity utility. APS serves more than 1.2 million customers in 11 of the state's 15 counties.

Voice For A Better Arizona

Comments

comments powered by Disqus
Latest News