US Airways Group and American vowed on Wednesday to fight the federal government’s anti-trust lawsuit in court by arguing their proposed US$11 billion merger would promote competition.
The US Department of Justice, six state attorneys general and the District of Columbia challenged the proposed merger on Tuesday saying the creation of the world’s largest airline that would result would stifle competition, drive up airfares and reduce services.
To underline their determination to fight for the merger, the airlines introduced their three high-powered lawyers who said they would argue the proposed deal would promote competition.
The lawsuit, filed in a Washington D.C. federal court, is likely to delay final approval of the bankruptcy exit plan of American Airlines’ parent company, AMR Corp, which is still planned for Thursday. It also is almost certain to delay, if not derail, the merger, which the airlines had expected to conclude next month.
The lawyers said the US government’s case, laid out in a 56-page complaint, was weak.
“If they are going to convince the court that the sky is falling, which essentially is what they are trying to do here, they are going to have to have more meat than they’ve shown us so far,” said Joe Sims, a partner with Jones Day who was hired by American Airlines. Sims was lead counsel in the US$13 billion merger of XM Satellite Radio Holdings and Sirius.