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July 02, 2013

Lawsuit filed by consumers to try to block American-US Airways merger

A lawsuit has been filed in California federal court to try to stop the merger between American Airlines and US Airways.

Joseph Alioto, an anti-trust attorney who has filed several anti-trust suits, said the merger will hurt consumers and drive up airline ticket prices. There are 38 plaintiffs as part of the lawsuit, including four Texas residents, which was filed against US Airways. The lawsuit does not include American or its parent company, AMR Corp., since the Fort Worth-based carrier is operating under bankruptcy protection.

"The combination is not going to be good for the business travelers," Alioto said in an interview on Tuesday. "The availability of flights is going to be less, the capacity will be less and prices will be higher."

US Airways spokesman Ed Stewart said the lawsuit was without merit and the carrier expects the merger to close in the third quarter as currently planned.

"As is often the case with high-profile mergers, lawsuits containing baseless allegations such as these are filed and they are successfully defended," Stewart said.

Alioto's firm has filed other airline merger anti-trust suits including one trying to stop Southwest Airlines' purchase of AirTran Airways. The court ruled in Southwest's favor and ordered Alioto's firm to pay $67,495.30 in attorney fees.

Sevearl of the plaintiffs in the US Airways-American Airlines lawsuit have also appeared on similar lawsuits that Alioto has filed. He also filed suits trying to block the Northwest Airlines-Delta Air Lines merger and the United Airlines-Continental Airlines merger.

In the suit filed on Tuesday, Alioto argues that the top three airlines will control over 80 percent of the domestic airline and when Southwest is included, 96 percent of the domestic market will be controlled by four carriers.

"The proposed merger would be the fourth mega-merger in five years  in the airline industry," the suit says. "This action is the only remaining avenue available to 'arrest' the march to monopoly power in the airline industry."

The U.S. Department of Justice is currently reviewing the proposed merger between American and US Airways. The shareholders of US Airways are scheduled to vote on the merger at a meeting on July 12.

-Andrea Ahles

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Comments

Bill

Seems like this Alioto fellow has made a pretty penny being a professional merger blocker. He also doesn't has a very good track record. Doubt he will be successful here either.

CeoCrookWannaBe

HAHAHAHAHA-------Going up against these slimy crooks? You'll be laughed out of the courthouse

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