Big Hurdles for DOJ in Airline Merger Lawsuit

August 18, 2013

Mark Ostrau, co-chair of Fenwick & West’s antitrust and unfair competition group, is quoted in an article in The National Law Journal titled “Big Hurdles for DOJ in Airline Merger Laws​uit” on the lawsuit filed by the United States Department of Justice and several states to block the proposed $11 billion merger of American Airlines and US Airways.

The proposed $11 billion merger, which would create the world’s largest airline, has raised questions over consolidation in the airline industry.

The government complaint centers on the issue of competition from other “legacy carriers,” or those airlines consumers view as preferable and that offer service in all relevant markets. The merger would reduce the number of legacy airlines from four down to three.

Ostrau says that the government took a slightly different approach in looking at the markets in which the airlines operated. The National Law Journal paraphrases Ostrau as saying that “[i]n earlier airline mergers, the focus was on markets in which the merging parties both provided nonstop flights. This lawsuit looks at the market more broadly, including connecting flights.

"What's changed?" According to the article, “[b]y casting the net so broadly, Ostrau said, the complaint ‘doesn't really allow for an easy fix.’"