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American Airlines and US Airways to fight merger lawsuit

Virginia residents may be interested to learn that the United States Justice Department is attempting to block a merger between American Airlines and US Airways. Such a merger would create the largest airline in the world, which, executives claim, would be better armed to compete against United and Delta. The department files the suit in the District of Columbia, Virginia and four other states.

The justice department claims that the merger would be detrimental to travelers, as it would create higher fares and poorer customer service, even though the shareholders and creditors would benefit financially. The department fears that such mergers and acquisitions would stop competition at over 1,000 pairs of cities where the airlines provide connecting flights and compete. In addition, cutting out non-stop competition between Dallas and Charlotte would cost travelers over $3 million a year along that route. Also, if the merger took place, customers might have to pay more in baggage fees and frequent flier redemption costs. A consumer rights advocate with Consumers Union believes that a merger is a dangerous idea, as it would make the airline too big to fail.

Airline officials are shocked that the department is fighting the merger, and they plan to do everything in their power, including counter suing, in order to attempt to push the merger through. Unions such as the Association of Professional Flight Attendants and the Allied Pilots Association support the merger.

A skilled business and commercial law attorney could be invaluable in helping small businesses and corporations in Virginia with matters such as drafting contracts, real estate transactions, and mergers and acquisitions. A lawyer may be able to arm those in business with the knowledge that they need in order to make decisions that will be most beneficial.

Source: USA Today, "Justice Department challenges American-US Airways merger", Bart Jansen, August 13, 2013

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