DOJ, States Sue to Block US Air-American Merger

The Justice Department and a number of US state attorneys general are challenging the proposed $11 billion merger between US Airways Group Inc. and American Airlines' parent company, AMR Corp. A lawsuit filed in federal court in Washington, DC, seeks to prevent the companies from making the deal in order to preserve head-to-head competition.

The Justice Department says the merger would result in the creation of the world's largest airline, and that a combination of the two companies would reduce competition for commercial air travel in local markets and result in passengers paying higher airfares and receiving less service. No comment yet from either airline.