Boston, MA 08/15/2013 (wallstreetpr) – The Justice Department in a queer act moved to block the much awaited and anticipated merger of two of the famous airlines services of the country. The merger of the American Airlines parent AMR Corp. and US Airways Group Inc (NYSE:LCC) was very much on the cards, but now it stands blocked. This merger was vital for the revival of the U.S. airlines that has been agonized by heavy losses over a prolonged period of many years.
This legal stay on the merger could very well play a spoilsport for the AMR’s plan to briskly emerge out from a state of bankruptcy since this merger formed the basis of its revival. Both the airlines were hopeful that they would have blessings in the form of a go ahead from Washington prior to the bankruptcy court hearing. This merger was much of an exit plan from the terrible state of the airlines which had the support of the company’s creditors and unions.
However, the American and the U.S airlines are in no mood to accept this decision and have said that they would represent a valiant and vigorous defence on the stay imposed on their merger. They are confident of being able to pursue all the legal steps towards their combination that would lead to the formation of the world’s largest airline.
The law department has imposed the stay stating that this merger would hurt the competition as then there would be just four airlines controlling 80% of the U.S market resulting in higher fares, high fees and lesser choices.
US Airways stock decrease
The US Airways Group stocks have witnessed a decrease by around 13.03%. The blockage of its merger with American Airlines has shattered all its revival dreams and its hope of coming out from its terrible state. The merger has been blocked to prevent the monopoly of a few airlines in the country. However, the airline company will challenge the stay with vigour in the court of law.
