AMR Corp., bankrupt parent company of American Airlines, and US Airways Group Inc. responded to the Department of Justice’s challenge of the merger of the two airlines, claiming that the DOJ fails to offer any “coherent rationale” supporting its lawsuit filed to block the merger.
The lawsuit, filed on Aug. 13 by DOJ, six state attorneys general and the District of Columbia, claims that the merger, if permitted, would reduce competition and increase airfares for consumers. American and US Airways, however, claim that the challenge ignores that the combined network of the two major carriers will increase competition against other major carriers, while opening up new routes for travelers and generally meeting the increased demand of consumers.
One of DOJ’s arguments against the merger is that competition on connecting service would be reduced. The airlines argue, however, that DOJ’s focus on “more than 1,000” overlapping routes is misleading. Of the 623 domestic nonstop routes operated by American and US Airways, there is competition between the two carriers on 17 nonstops, with most of those overlaps being served by other carriers. The remaining 994 are one-stop connecting routes that American claims represent a mere fraction of the 13,000 operated by it and US Airways. American also points out that on almost half the routes cited by DOJ in its challenge, the airlines carry less than 10 percent of the passengers in those respective markets, and once the merger is complete, “almost 90% of the passengers on these routes will continue to be served by at least three airlines.”
Trial is set for November 2013.