Justice Department sues over American Airlines-US Airways merger, fears higher airfare, less service

WASHINGTON (AP) -- The Justice Department and a number of state attorneys general are challenging the proposed $11 billion merger between US Airways Group Inc. and American Airlines' parent company, AMR Corp.

RELATED: Shareholders OK merger; Justice Dept. reviewing deal (http://bit.ly/1cxArit)

The Justice Department says the merger would result in the creation of the world's largest airline. The government says a combination of the two companies would reduce competition for commercial air travel in local markets and would result in passengers paying higher airfares and receive less service.

RELATED: American, US Airways announce $11 billion merger (http://bit.ly/12l1KqJ)

A lawsuit filed in federal court in Washington, D.C., seeks to prevent the companies from making the deal in order to preserve head-to-head competition.

American Airlines employs 4,600 employees in Tulsa. In a statement, Tulsa Mayor Dewey Bartlett blamed President Barack Obama and his administration for the suit.

"The lawsuit filed against the American Airlines/US Airways merger is a late and irresponsible challenge by the Obama Administration. Ironically, I believe that if American Airlines had asked for a bailout, the Obama Administration would have already given it to them. But, American Airlines didn't ask for a bailout, they along with US Airways, want to solve their problems in the free market and President Obama wants to stand in the way. Has President Obama done enough to slow our economy? He continues to harm free market solutions with government intervention into free market affairs."

Dale Danker, president of TWU Local 514, also commented on the news Tuesday. Danker said Tulsa workers were expecting to receive stock options and a 4.3 percent pay raise as a result of the merger.

He also questioned why United and Delta airlines were allowed to merge without government interference.

"We are disappointed, to say the least, here in Tulsa, about that decision," he said. "We had a pay raise coming. We were going to exit bankruptcy and be given some stock options. All that will be revisited."

A spokesman for US Airways had no immediate comment. American Airlines did not immediately return a call seeking comment.

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