Multi-state coalition opposes merger of U.S. Airways, American Airlines

By Bryan Cohen | Aug 13, 2013

NASHVILLE, Tenn. (Legal Newsline) - Tennessee Attorney General Robert Cooper announced Tuesday that he joined a multi-state and federal complaint to challenge the pending merger between U.S. Airways and American Airlines.

Tennessee joined a coalition of six states, the U.S. Department of Justice Antitrust Division and the District of Columbia in a federal court complaint to challenge a merger that would make the combined U.S. Airways and American Airlines into the largest worldwide carrier. The complaint alleges reducing the number of major airlines from five to four would make fare and fee increases easier and would make airlines even more profitable than they already are.

"Studies show that Tennessee's four major airports in Nashville, Memphis, Knoxville and Chattanooga will experience fewer flights to certain destinations and travelers will pay more for remaining flights," Cooper said. "If this merger is completed, consumers will face decreased competition and increased prices because airlines can cut service and raise prices with less fear of competitive responses from rivals."

Cooper's office said the elimination of competition for Tennessee customers could result in fewer flights between Nashville, Chattanooga, Knoxville and Memphis.

Following mergers in 2008 that reduced the six legacy airlines to five, new fees were imposed, fares were raised and amenities were downgraded.

American Airlines entered bankruptcy with plans to restructure and remain independent. The company earned a record-high $5.6 billion in revenues in its most recent quarterly results with $357 million in profits.

According to Cooper's office, U.S. Airways employs a capacity discipline strategy that substantially reduces service and service capacity. If the merger goes through, the airline could continue the strategy by removing seats and raising fares.

Aside from Tennessee and the District of Columbia, other states participating in the complaint include Texas, Arizona, Florida, Pennsylvania and Virginia.

More News

The Record Network