American Airlines, US Airways Merger Faces Additional Challenges

Last week, the proposed merger of American Airlines and US Airways faced additional scrutiny when nineteen states joined the U.S. Department of Justice's investigation of the pending transaction.  Greg Abbott, Texas Attorney General, is leading the effort on behalf of a group of attorneys general from states including New York, California and Florida.  This move by the states comes after the Government Accountability Office released a report last month that concluded the merger would reduce competition by eliminating an effective competitor in 1,665 routes.

Additionally, 40 consumers filed a suit against the airlines in the Northern District of California this week seeking to stop the merger.  Ford, et al. v. US Airways Group, et al., case number 13-cv-3041.  The complaint alleges that the deal would lead to anticompetitive effects that harm consumers, such as additional charges for amenities normally included in the ticket price, a decline in the quality of service,