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

By Shaun Courtney

Virginia Attorney General Ken Cuccinelli has joined with his counterparts in five other states and the District of Columbia in a U.S. Department of Justice 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 United States with just four major airlines, compared to the nine this 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 U.S. commercial air travel market in the hands of four companies.

For the metropolitan Washington area, the impact of a merger would give the combined company six times as many take-off and landing slots at Ronald Reagan Washington National Airport as any of its competitors, according to attorneys general in Virginia and the district.

And the impact would be felt throughout the commonwealth.

"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," Cuccinelli said 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."

U.S. Airways currently has nonstop service from National to 71 airports. If the merger goes through, it would no longer face nonstop competition to 59 of those airports. The Justice Department's complaint indicates this would result in higher fares.

It's the concern over those higher fares, ancillary fees and other costs that drives the Justice Department'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,” said Bill Baer, assistant attorney general in charge of the Justice Department’s Antitrust Division.

Read the full release from the Justice Department here.