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US Justice Department determined to block American Airlines-US Airways merger

US Justice Department determined to block formation of the world's biggest airline

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Opponents of the American Airlines-US Airways merger say it would clear the way for fare hikes and new fees. Photo: Reuters
Reuters

American Airlines and US Airways could be in for a long and bruising courtroom battle against seasoned lawyers if they choose to fight the US Justice Department's objection to their merger.

Several experts in antitrust law said the Justice Department's aggressive stance in a suit it filed in the US District Court in Washington signalled an intention to block the deal, not just a ploy to get concessions before possible future approval.

If the department persuades a judge to agree, it will have scuttled an US$11 billion deal intended to create the world's largest airline. The government argued that the merger would reduce competition for commercial air travel throughout the US and cause passengers to pay higher fares and receive less service.

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The department's antitrust division has been picking and winning some big fights in recent years. Last month it won a trial over e-book price-fixing against Apple. In 2011, it blocked a proposed US$39 billion merger between AT&T and T-Mobile USA.

One sign government lawyers were set on blocking the deal could be found in an appendix to its lawsuit, said Mark Ostrau, a Californian antitrust lawyer.

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The appendix lists 1,043 airline routes between cities where, according to the Justice Department, the combined company would have a presumptively illegal monopoly or near monopoly.

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