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The Department of Justice, six state attorneys general and the District of Columbia filed an antitrust suit against US Airways( LCC) and American Airlines' parent, AMR Corp., saying their proposed merger would lessen competition.
The pairing would create theworld's largest airline, worth about $11 billion, and cap a decade of airline mergers that's left about 85% of U.S. fliers with just four airlines tochoose from.
The announcement of the action came a week after the airlines announced they'd received clearance from the European Union for their merger.
Shares of US Airways were down 12% Tuesday amid a sector rout in the stock market todayUS Air and AMR, which is emerging from bankruptcy, announced the deal on Feb. 14, and antitrust regulators began a review process to determine whether further industry consolidation wouldboost ticket prices and hurt consumers.
U.S. Attorney General Eric Holder said in statement Tuesday, "This transaction would result in consumers paying the price — in higherairfares, higher fees and fewer choices."
The carriers have said the new company would have synergies that would enable it to keep costs down.
Southwest became one of the big four airlines with its 2011 acquisition of AirTran Airways. Among other recentpairings, Delta bought Northwest Airlines, and United Continental was formed by the merger of United and Continental in 2010.
