Recapping the day's news and newsmakers through the lens of CNBC.
US Airways-AMR merger seen as anticompetitive
So many airlines have merged over the years that you need a program to remember the players. But now there may be one less realignment to keep straight: the Department of Justice and a number of states attorney's general have moved to block the $11 billion combination of US Airways and American Airlines' parent, AMR Corp.
The deal announced in February would create the world's largest airline, with 6,700 flights a day and over $40 billion in annual revenue. And that's just what concerns officials, who worry it would reduce competition, cause prices to rise and undermine service.
US Airways shares plunged after Justice and the others filed a federal lawsuit this morning to block the deal. AMR filed for bankruptcy in 2011. A wave of mergers that began in 2008 has created the three largest airlines—United, Delta and Southwest. The USAir-AMR deal would create the fourth.
In filing the antitrust case, the government has expressed concerns similar to ones it cited in opposing the merger of AT&T and T-Mobile—that the merger would reduce industry capacity. The airlines are expected to fight the suit.
"That's a significant stumbling block, when the DOJ comes after you. Not that it necessarily can't be beaten. The DOJ has been beaten before...[But] when you're consolidating an industry and you're down to a handful of players, that also becomes the key issue."
—CNBC's David Faber
"Had it been, say, six or seven years ago, it probably wouldn't raise the objections that it raises now, because ticket prices are clearly on the way up."
—CNBC's Simon Hobbs