Federal judge rejects least plea of consumers for stopping merger between American Airlines and US Airways

Published on : Saturday, December 7, 2013

American-Airlines-and-US-AirwaysThe consumers and travel agents’ last efforts at stopping the merger between American Airlines and US Airways were rejected by the federal judge. There is anticipation that price will shoot up and the service will go down with the planes becoming more crowded.

The combination of American’s parent AMR Corp (AAMRQ.PK) and US Airways Group Inc (LCC.N) would create the world’s largest carrier and would follow last month’s resolution of antitrust objections by the U.S. Department of Justice.

That settlement requires the airlines to shed some landing slots and gates at several airports, including in New York and Washington, D.C., and had won approval on November 27 from U.S. Bankruptcy Judge Sean Lane, who oversees AMR’s Chapter 11 case.

A Californian resident appealed to the U.S. District Court in Manhattan and urged that Lane’s order be put on hold saying that the merger would result in irreparable damage.

According to a Wednesday court filing, the consumers and travel agents said combining the carriers could result in fewer flights and available seats, higher fares, poorer service and lower competition, and would be hard to undo once completed.

The Chief Judge of the U.S. District Court in Manhattan said that the plaintiffs had failed to show irreparable harm. The lawyer for the consumers and travel agents said that he would seek appeal but his request was denied by the Chief Judge to suspend the effect of her ruling pending an appeal.

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