DC, Virginia Join Suit Against $11 Billion Merger of US Airways and American Airlines

by Shaun Courtney

Attorneys General for the District of Columbia and Virginia, along with five other states, joined a U.S. Justice Department civil antitrust lawsuit to prevent the proposed $11 billion merger of US Airways and American Airlines, citing concerns over service reductions and increased fares.

The merger would leave the U.S. with just four major airlines, compared to the nine the country had as recently as 2005. According to the complaint, the merged airline would be the largest in the world and would put 80 percent of the United States commercial air travel market in the hands of four airlines.
For the metropolitan Washington area, the impact of a merger would give the combine company six times as many take-off and landing slots at Reagan national Airport as any of its competitors, according to both the DC and Virginia attorneys general. 

“Reagan National Airport provides a unique and important service for D.C. consumers and should not be dominated by any one airline,” Attorney General Irvin Nathan said in a prepared statement. “D.C. consumers will benefit from more local airline competition, not less.”

In Virginia, the merger would impact several airports that serve Virginia residents.

"The merger, as proposed, significantly reduces competition and poses too big a threat of higher fares for Virginia consumers at Reagan National, Richmond International, Norfolk International, and Charlottesville-Albemarle airports," said Virginia Attorney General Ken Cuccinelli in a prepared statement.  

"This is especially true at Reagan National Airport, where the combined airline would hold 69 percent of the takeoff and landing slots," added Cuccinelli. 

U.S. Airways currently has nonstop service from Reagan to 71 airports and after the merger would no longer face nonstop competition to 59 of those airports. The DOJ's complaint says this would result in increased fares.

The concerns over increased fares, ancillary fees and other costs is a driving factor behind the DOJ's complaint. 

“The merger of these two important competitors will just make things worse –exacerbating current airline industry trends toward reduced service, increasing fares and increasing passenger fees,” explained Bill Baer, assistant attorney general in charge of the Department of Justice’s Antitrust Division.

Read the full release from the Justice Department here.