American Airlines and US Airways plan to fight on for merger

When the Justice Department joined six states and the District of Columbia in a lawsuit yesterday to block the proposed merger of American Airlines and US Airways, shippers may have good reason to feel ambivalent.

“It’s sort of ‘good news-bad news’ story,” said Brandon Fried, executive director of the Airforwarders Association.

On the one hand, shippers may be relieved that less consolidation will provide them with more route options. But at the same time, we have to be concerned with the sustainability of both carriers in the deal.”

Indeed, American Airlines had planned to emerge from bankruptcy in the next few weeks before teaming with US Airways and take on its larger competitors. Meanwhile, both airlines plan to fight the lawsuit.

Should the proposed merger eventually prevail, it would mean the creation of the world’s largest airline, making 70% of the U.S. market dependent on US Airways-American Airlines, United Airlines, Southwest Airlines, and Delta Airlines.

The European Commission and the judge overseeing the bankruptcy proceedings of AMR Corp. – the parent company of American Airlines – had already given the green light to the deal before the Justice Department weighed in with its objection.