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Proposed airline merger faces government challenge

WASHINGTON — The federal government is challenging the proposed merger of American Airlines and US Airways, saying it would cause “substantial harm” to consumers by leading to higher fares and fees.

The U.S. Justice Department, joined by the attorneys general of six states, filed a lawsuit to block the merger today in federal court in Washington, D.C.

The airlines said the government’s conclusions were wrong, and they vowed to use “all legal options” to fight back.

The government’s challenge threatens to quash a deal that would create the world’s largest airline by passenger miles. The airlines could challenge the government in court, or possibly agree to concessions that would convince regulators to approve the merger.

The lawsuit caught many observers by surprise. In the last five years, antitrust regulators had allowed three other major airline mergers to go ahead, leaving five airlines in control of about 80 percent of domestic market. But the government argued that this merger would hurt consumers around the country by eliminating a competitor on more than 1,000 routes.

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