Justice Department Blocks USAirways-American Proposed Merger

In a surprise move, the U.S. Department of Justice filed suit to block the merger between American and USAirways on grounds that the combined carriers would reduce competition and result in higher fares.

The combined carriers have refused to surrender slots at Reagan National Airport and threatened to cut services to smaller airport if Justice forced the surrender of slots. 

The intransigence of Doug Parker, CEO of USAirways and the expected CEO of the combined carrier has obviously backfired and the proposed merger is in serious trouble unless the merged carriers will agree to give up some slots and address major anti-competitive concerns. The expectation of USAirways/American was for the Department of Justice and Transportation to rubberstamp whatever deal these two carriers put on the table.  That did not fly.

Update:
The parent company of American Airlines, Inc., and US Airways Group, Inc. (NYSE: LCC) today announced that they intend to mount a "vigorous and strong defense" to the U.S. Department of Justice's ("DOJ") effort to block their proposed merger.
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