Holder: US Air, American merger would mean 'higher airfares, hig - WRCBtv.com | Chattanooga News, Weather & Sports

Holder: US Air, American merger would mean 'higher airfares, higher fees'

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NBC News and wire reports

The Justice Department and attorneys general from six states and Washington, D.C. have sued to stop the proposed $11 billion merger between US Airways and Americans Airlines' parent company.

Filing the suit in federal court in D.C., they say the merger would create the world's largest airline and "would substantially lessen competition for commercial air travel in local markets throughout the United States and result in passengers paying higher air fares and receiving less service."

Attorney General Eric Holder said the transaction between US Air and AMR Corp. would result in "higher airfares, higher fees and fewer choices."

If approved, the four biggest U.S. airlines — American, United, Delta and Southwest — would be the products of mergers that began in 2008. Those deals have helped the industry control seats, push fares higher and return to profitability.

AMR Corp. has cut costs and debt since it filed for bankruptcy protection in late 2011. Pilots from both airlines have agreed on steps that should make it easier to combine their groups under a single labor contract, a big hurdle in many airline mergers.

In February, the companies disclosed their plans to create a company with 6,700 daily flights and annual revenue of roughly $40 billion.

Last year, business and leisure airline travelers spent more than $70 billion on airfare for travel throughout the United States.

The attorneys general were from Arizona, Florida, the District of Columbia, Pennsylvania, Tennessee, Texas and Virginia. 

A spokesman for US Airways had no immediate comment. American Airlines did not immediately return a call from The Associated Press seeking comment.

NBC's Pete Williams and The Associated Press contributed to this report.

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