The US government has challenged the proposed merger of American Airlines and US Airways to create the world's largest airline.
It said it would cause "substantial harm" to consumers by leading to higher fares and fees.
The US Justice Department filed a lawsuit to block the merger in federal court in Washington DC yesterday. The government's challenge threatens to quash a deal that would create the world's largest airline by passenger miles.
The airlines could challenge the government in court, or possibly agree to concessions that would convince regulators to approve the merger.
The lawsuit caught many observers by surprise. In the last five years, competition regulators had allowed three other major airline mergers to go ahead, leaving five airlines in control of about 80% of the US domestic market.
But the government argued that this merger would hurt consumers around America by eliminating a competitor on more than 1,000 routes.
If the merger leads to even small increases in ticket prices or airline fees, it would cost American consumers hundreds of millions of dollars each year, the department said.
The lawsuit will not necessarily stop the deal. The airlines could fight back in court, but it might not even get that far.
Analysts said that the Justice Department, which has been talking to the companies for months, could be seeking more time and leverage to squeeze out some concessions.
Even outside the two companies, many in the airline industry had expected that the deal would easily win regulatory approval like Delta's purchase of Northwest, United's combination with Continental, and Southwest' acquisition of Air
