US Airways-American merger: Feds, states challenge airline deal

American Airlines And US Airways Announce Merger Agreement

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Doug Parker (L), Chairman and CEO of US Airways, and Thomas Horton, Chairman, President and Chief Executive Officer of American Airlines speak during a news conference to announce the merger of the two airlines February 14, 2013 in Dallas, Texas. The Justice Department is challenging the deal.

The Justice Department and a number of state attorneys general are challenging the proposed $11 billion merger between US Airways Group Inc. and American Airlines' parent company, AMR Corp.

The Justice Department says the merger would result in the creation of the world's largest airline. The government says a combination of the two companies would reduce competition for commercial air travel in local markets and would result in passengers paying higher airfares and receive less service.

RELATED: What will an American-US Airways merger mean for travelers?

A lawsuit filed in federal court in Washington seeks to prevent the companies from making the deal in order to preserve head-to-head competition.

A spokesman for US Airways had no immediate comment. American Airlines did not immediately return a call seeking comment.

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