Setback for airline merger plans
American Airlines and US Airways will challenge a US Department of Justice (DOJ) decision that their merger should not go ahead.
The DOJ says customers would be worse off if the £7bn deal went ahead, as a merger would result in less competition and price rises.
The decision has been welcomed by the Washington DC-based Business Travel Coalition (BTC), however, the airlines said they will appeal.
US Airways chairman and chief executive Doug Parker said: "We are extremely disappointed in this action and believe the DOJ is wrong."
AA and US Airways had intended to merge by the end of the year. The deal has already been approved by the European Union.
US attorney general Eric Holder issued a statement saying: "By challenging this merger, the Department of Justice is saying that the American people deserve better.
"This transaction would result in consumers paying the price – in higher air fares, higher fees and fewer choices."
BTC chairman Kevin Mitchell said: "In recent years… the major airlines have, in tandem, raised fares, imposed new and higher fees, and reduced service.
"Competition has diminished and consumers have paid a high price."
Lisa
Lisa joined Travel Weekly nearly 25 years ago as technology reporter and then sailed around the world for a couple of years as cruise correspondent, before becoming deputy editor. Now freelance, Lisa writes for various print and web publications, edits Corporate Traveller’s client magazine, Gateway, and works on the acclaimed Remembering Wildlife series of photography books, which raise awareness of nature’s most at-risk species and helps to fund their protection.
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