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Federal government sues to block airline merger

American Airlines and American Airlines is expected to spend this week cruising toward completion of the merger will create the world's largest airlines.
Instead, they were stunned Tuesday when the federal government and six states sued to stop trading, saying it would harm competition and consumers more expensive fares and additional costs millions of dollars a year.
Antitrust regulators to do a little interference with other big airline mergers in the past five years, including Delta and Northwest Airlines and American continents. Therefore, they are not expected to stand on American Airlines and American Airlines way. But this latest deal will leave four airlines holding more than 80% of the U.S. air travel market.
Litigation, said: "By further reducing the traditional airlines and encourage those who are still aligned with the economy, American Airlines and U.S. merger will make it easier for the remaining airlines to cooperate rather than compete, price and service,."
Department of Justice turned to American Airlines for their leaders to say. In Washington, DC Federal District Court filed 56 indictments, interspersed with from the internal e-mail, investor presentations and public comments, including senior management of that previous mergers have helped lead to higher fares and more high cost quote, checking bags or change a vote.
Two company's stock plunged, executives vowed to challenge the lawsuit.
U.S. Airways CEO Parker (Doug Parker), the combined company will be run, "declared:" We will fight them.
Paul Dennis, Washington antitrust lawyer hired American Airlines said Tuesday it will on this issue is the Justice Department's "best day."
They held a press conference, and now they've got to try their case in court, "he said."
American Airlines parent AMR CEO Tom Horton said the company has spent months trying to convince the U.S. Department of Justice merger will help clients improve their competitiveness, creating a tough new rival larger aviation Company and Delta.
Since November 2011, AMR has been operating under bankruptcy protection. It has cut labor costs, renegotiate aircraft and other lease and get $ 221 million profit in the second quarter from April to June period of six years - its first profit. Endeavour with hundreds of new aircraft orders.
The company originally expected the highlight of this week is Thursday hearing in federal bankruptcy court judge approved its reorganization plan, including the merger. This will be one of the final steps before the end of September AMR exit Chapter 11 protection.
Hearing may go ahead, and the Justice Department's case against the resolution, the judge can approve AMR's restructuring plan. But it may not be out at least several months AMR bankruptcy fight the lawsuit, company officials said.
American Airlines and American Airlines have been so confident that they have merged quickly named the combined company, which is in Tempe, Arizona, according to AMR's headquarters in Fort Worth, and called on U.S. Airways Group executives high Tube airlines have in the Dallas - Fort Worth area looking for an apartment.
This lawsuit could put aside those real estate transactions. Buckingham Research Group analyst Daniel McKenzie said, merging 99% probability of 50 percent.
This lawsuit may never go to trial. Analysts said the Justice Department may seek more time to squeeze concessions and leveraged companies, such as give up some of their precious Ronald Reagan National Airport takeoff and landing slots, which will create a new competitor in this space busiest airports across the Potomac River from Washington.
In the press conference, Assistant Attorney General Bill Bell said the Justice Department stands ready to discuss solutions, however, it is more like the time to seek an injunction to block the deal.
"We take a look at today's market, it's not normal competitive as it should be," Bell said, "If the deal goes through, it will be worse."
Join in the lawsuit, which is made up of six states and the District of Columbia, the Attorney General, the Justice Department said that the merger would lead to higher fares and fees, resulting in "substantial harm" to consumers.
Government lawyers cited American Airlines flights operating one-stop direct flights, weaken the U.S. and other countries opponent a few hundred dollars. After the merger, they say, American Airlines will give up this practice, pushing up fares.
Lawsuit caused many observers by surprise. In the past five years, the Bush administration's antitrust regulators have allowed Delta bought Northwest Airlines, and the Obama administration to allow United Airlines and Continental combined with Southwest Airlines, AirTran's. Countries have major carriers from nine to five in 2005, and the Justice Department has no objection from the United States in 2001 tried to buy American Airlines, later abandoned an agreement, an airline merger.
"Delta Northwest merger, they do not have any problems, there is no problem with the U.S. mainland, where they think this is going to do?" Aviation consultant who once worked in the United States Robert Mann said.
Consumer advocates hailed litigation.
"This is the best news that consumers are likely to get, said:" Charlie Leocha director of Consumer Travel Alliance members a group recommended that the Government of tourism consumer issues.
Last year, business and leisure travelers to spend more than 70 billion U.S. dollars in the United States ticket.
AMR and American Airlines in February announced their plans to merge into a carrier with 6,700 daily flights, annual revenues of approximately $ 4 billion. Passenger traffic, it will be a little overshadowed United Airlines and Delta Airlines, but all three are similar in size.
Merger is expected to boost the American presence along the East Coast, U.S. Airways has a stronghold, Washington, Philadelphia and Charlotte. This will also increase the U.S. route network to help airlines win lucrative travel company accounts.
When it was proposed, the deal is worth $ 11 billion. Last week, AMR's creditors, said prices American Airlines, which investors will receive 28% of the new company's shares lifted, to $ 140 billion worth.
Lawsuit news, U.S. Airways shares fell $ 2.46, or 13.1 percent, to close at $ 16.36. AMR shares on the New York Stock Exchange shortly after the company filed for bankruptcy protection, but still over the counter trading. They were down $ 2.64, or 45.4 percent, to $ 3.17.
 



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