The Justice Department, along with the attorneys general of six states, filed a lawsuit on Tuesday seeking to block the proposed merger of American Airlines and US Airways.
The $11 billion deal, announced in February, took American out of bankruptcy. It would create the nation's biggest airline, a company with the size and breadth to compete against United Airlines and Delta Air Lines, which have grown through mergers of their own in recent years and are currently the biggest domestic carriers.
But in the complaint filed Tuesday in Federal District Court in the District of Columbia, the Justice Department said that the merger "will leave three very similar legacy airlines - Delta, United and the new American - that past experience shows increasingly prefer tacit coordination over full-throated competition."
The complaint goes on, "By further reducing the number of legacy airlines and aligning the economic incentives of those that remain, the merger of US Airways and American would make it easier for the remaining airlines to cooperate, rather than compete, on price and service."
US Airways stock was down 7 percent in trading after the suit was filed.
The lawsuit was filed on behalf of the attorneys general of Arizona, Florida, Tennessee, Texas, Pennsylvania and the District of Columbia.
The action is the latest in a series of prominent antitrust moves by the Obama administration Justice Department. In January, the agency sought to block Anheuser-Busch InBev's $20.1 billion acquisition Grupo Modelo, the Mexican maker of Corona beer (that deal was later modified to win approval) and in 2011 it thwarted AT&T 's proposed $39 billion takeover of T-Mobile USA. (Those companies abandoned the merger.)
The Justice Department's lawsuit against the merger of American Airlines and USAirways
