The government's decision Tuesday to oppose the merger of US Airways and American Airlines stunned airline analysts, but many predicted the deal eventually will win go through.
"Given that other airline mergers were approved, this was a surprise," University of Richmond transportation economist George Hoffer said. Other major carriers already have been allowed to combine forces, so "it's illogical to oppose this merger. This move comes a day late and a dollar short," he said.
The Justice Department lawsuit generally is being seen as a negotiating tactic rather than an effort to kill the $11 billion deal.
"The DOJ challenge could be a power play designed to force the airlines to give up routes, gates, and slots" to allow for more competition within the industry, George Hobica, founder of Airfarewatchdog.com, said in a written assessment.
The airlines suggest the suit will cause only a delay, not a derailment. In a letter to employees, American Chief Executive Tom Horton promised to vigorously defend the merger in a court process that "will likely take a few months."
The deal to create the country's largest airline was announced in February and appeared to be on track for a quick completion.
That's because in recent years, antitrust regulators have signed off on similar transactions. For example, the Obama administration approved the mega-mergers of United and Continental in 2010 and Southwest and AirTran Airways in 2011. The Bush administration approved Delta's merger with Northwest in 2008.
Given that US Airways already has made two round trips to bankruptcy court, and American has yet to emerge from bankruptcy, analysts assumed their combination would quickly win approval.
The Two-Way
Justice Sues To Block US Airways-American Airlines Merger