WASHINGTON, Aug. 13 (Xinhua) -- The U.S. Department of Justice (DOJ) on Tuesday filed a civil antitrust lawsuit to block the proposed merger between U.S. Airways Group Inc. and American Airlines' parent corporation, AMR Corp., saying the merger would reduce competition and result in higher airfares for passengers.
In a lawsuit filed in federal court in Washington, D.C., the Department of Justice sued to prevent the two companies from merging as the world's largest airline and to preserve the existing head-to-head competition between the firms.
The proposed 11-billion-dollar merger plan, announce by U.S. Airways and American Airline in February, would "substantially lessen competition for commercial air travel in local markets throughout the United States and result in passengers paying higher airfares and receiving less service," the department said in a statement.
"By challenging this merger, the Department of Justice is saying that the American people deserve better," said U.S. Attorney General Eric Holder. "This transaction would result in consumers paying the price - in higher airfares, higher fees and fewer choices."
According to the department's complaint, U.S. major airlines have succeeded in raising prices, imposing new fees and reducing service in recent years because of a reduction in the number of competitors in the U.S. market.
The vast majority of U.S. domestic airline routes have already been highly concentrated and the merger would result in four airlines controlling more than 80 percent of the U.S. commercial air travel market, the department added.
"If this merger goes forward, even a small increase in the price of airline tickets, checked bags or flight change fees would result in hundreds of millions of dollars of harm to American consumers," said Bill Baer, Assistant Attorney General in charge of the Department of Justice's Antitrust Division.
Last year, business and leisure airline travelers spent more than 70 billion dollars on airfare in the United States, according to the lawsuit.
The department also believed that American Airline, which is currently operating bankruptcy, could emerge as a vigorous competitor without the merger, as the company recently made the largest aircraft order in industry history.
However, AMR Corp. and U.S. Airways said in a joint statement that they intended to mount a vigorous and strong defense to the Department of Justice's effort to block their proposed merger.
"We believe that the DOJ is wrong in its assessment of our merger. Integrating the complementary networks of American and U.S. Airways to benefit passengers is the motivation for bringing these airlines together," they argued. "Blocking this procompetitive merger will deny customers access to a broader airline network that gives them more choices."
In a letter to employees, AMR CEO Tom Horton said the court process "will likely take a few months."
Analysts said the lawsuit made the merger hard to win regulatory approval. "I think it could be very difficult for the deal to go forward in the middle of this litigation," Carl Tobias, a professor at the University of Richmond School of Law, was quoted as saying.