Why Is the Obama Administration Trying to Stop the American-US Airways Merger?

Since when does the Department of Justice block airline mergers? After years of unopposed consolidation, the airline industry faces a surprising challenge to its latest merger: The DOJ filed suit today to stop the $14 billion union of American Airlines and US Airways.

The Justice Department said the merger, which would create the world’s largest airline, would lead to higher costs and hurt travelers. Six states, including Arizona and Texas, where the two airlines are based (US Airways in Arizona, American in Texas), joined the department’s lawsuit. “If this merger goes forward, even a small increase in the price of airline tickets, checked bags or flight change fees would result in hundreds of millions of dollars of harm to American consumers,” William Baer, a former attorney at Arnold & Porter in Washington who took over the DOJ’s antitrust unit in January, said in a news release announcing the lawsuit. “Both airlines have stated they can succeed on a standalone basis and consumers deserve the benefit of that continuing competitive dynamic.”