In the last few years there have been mergers between some of the country’s biggest airlines, including Delta and Northwest and United and Continental. These mergers went through unopposed, which is why the latest development in a proposed airline merger caught many people in Florida and around the country off guard.
The proposed merger between US Airways and American Airlines would mean that 80 percent of the commercial airline market in the United States would be controlled by four major airlines. This is a problem for the Justice Department because the lack of competition could ultimately hurt consumers. As a result, they are seeking an injunction to stop the merging of these two large companies. In their lawsuit, the Justice Department is joined by six states.
Florida is one of the states that is included in this unexpected lawsuit. Pam Bondi, Florida Attorney General, believes that the merger will negatively affect consumers in Florida. When the two companies merge, they will no longer be competing on flights, which may allow them to raise ticket prices and charge higher baggage fees. Bondi claims that 20 percent of these “problematic flight routes” directly affect Florida.
As executives for US Airways and American Airlines are finding out, merging two companies can be complicated and unexpected challenges can arise. Even still, both companies have stated that they plan to fight the lawsuit. If you are planning a private or a public merger, you may want to contact an attorney to find out your legal options.
Source: Orlando Sentinel, “U.S., Florida sue to block AMR-US Airways merger,” August 13, 2013