Everything you need to know about the American-US Airways merger

An American Airlines jet takes off behind US Airways jets at Ronald Reagan Washington National Airport August 13, 2013 in Arlington, Va. The U.S. Justice Department, and attorneys general from six states, filed legal actions today attempting to prevent the planned merger of US Airways and American Airlines as a violation of antitrust law.

It's been more than a year since American Airlines hinted it was interested in a merger, hoping to emerge out of bankruptcy. Earlier this year, the airline announced it had approved a deal with US Airways that would create the world's largest carrier.

"The new company, the new American, is going to have a great many more destinations. It will have more hubs across which to interchange traffic. In all respects, it will be a fundamentally enhanced competitor," former American Airlines CEO Bob Crandall told Marketplace Morning Report in February.

Sounds like serendipity, right? Better keep the receipt on that merger gift. The Justice Department filed a lawsuit Tuesday seeking to block the merger, saying it would reduce competition substantially, increase airfare and cut services. According to the New York Times, antitrust regulators have not challenged an airline merger since 2001.

So how did we get here, and what happens next? First, let's take a look back:

  • Months later, an agreement between the two emerged. Robert Isom, the COO of US Airways, and John Snook, the Senior Vice President of Customer Service at American Airlines, spoke to Marketplace Morning Report about the deal. "The scale of our network is really one of the biggest advantages that our customers will see," said Snook. Isom added, "When we take a look at some of the value that comes out of the merger, we're able to join US Airways' strong East Coast presence with American's global reach, and it's going to mean great things for our customers."

Could American-US Airways be the next bad merger? We'll have ongoing coverage as the Justice Department moves forward with its case.

About the author

Chau Tu is the former assistant web producer for Marketplace.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...