Pennsylvania has joined five other states and the U.S. Justice Department in filing suit to block the proposed merger of US Airways and American Airlines. The civil lawsuit claims the consolidation would hurt competition and lead to higher prices for flyers.
Pennsylvania Attorney General Kathleen Kane and her counterparts in Arizona — the home of American West which merged with US Airways in 2005 — Florida, Tennessee, Texas, Virginia and Washington, D.C. are challenging the $11 billion consolidation that was announced in February.
“Behind Texas, Pennsylvania is one of the most impacted states by this merger,” Kane said. “This transaction will negatively impact at least 1 million Pennsylvania travelers. It will increase the cost of flying.”
In addition to the possibility of higher fares, Kane said at least 700 jobs would be lost.
“US Airways has acknowledged that it would close its operations center outside of Pittsburgh built in part with a state grant and rely upon American’s operations center in Dallas, Texas,” Kane said.
In March, US Airways Chairman Doug Parker, who will be CEO of the new American Airlines, told employees that the Pittsburgh operations center, which opened in 2008, could be closed within a few years.
Kane claims that US Airways is making the same case that Delta did when it sought approval of its merger with Northwest and when United joined with Continental.
“Neither airline has delivered on its promises of dramatically increased services. Delta has even closed two hubs,” Kane said. “So this will definitely hurt Pittsburgh and growth in Philadelphia will be deterred."
US Airways and American Airlines say they will use "all legal options" to fight back against a challenge to their merger plans which would create the world’s largest airline.
The two airlines say the government's conclusions are wrong. In a statement, they say they would create a stronger network of flights that would give travelers more choices.
The Justice Department didn't rule out a settlement.
