TODAY   |  August 14, 2013

Airline merger bad for consumers, says Justice Dept.

The Justice Department says a merger between U.S. Airways and American Airlines would cut competition and raise ticket fares. NBC’s Tom Costello reports.

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>> much. we have new developments this morning on a story that could have major implications on air travel in this country. american and u.s. air are vowing a court fight after the government sued to block a merger that would create the world's largest airline. let's go back to tom costello at reagan national for more on that. tom, good morning again.

>> reporter: matt, good morning. the reason we're here at reagan is the government says if this merger goes through u.s. airways and american as a single airline would control 69% of the take off and landing slots here at dca driving prices up here and across the country. in the world of airline mergers this was going to be a big one.

>> let's introduce ourselves to the world. not again, but for the very first time.

>> reporter: but a marriage between u.s. airways and american always made some customers uneasy.

>> it's going to stifle competition. it's going to allow fares to go up and i'm not too pleased about it.

>> i'm mostly concerned about price if the two airlines merge and if their prices are no longer competitive then i would be unhappy.

>> reporter: now the justice department is moving to block the deal and it's swroin bd i a partisan group from six states and d.c. including arizona and texas, the states in which both airlines are based.

>> the impact is less choices where they could go, when they could go. the prices would be higher. the service would be lower.

>> reporter: but in a joint statement the airlines vowed to fight the government in court saying blocking this pro-competitive merger will deny customers access to a broader network that gives them more voices and provides the best outcome for those struggling from bankruptcy. analysts say it makes good sense.

>> this industry has a track record of too many planes and too many players. unless can they tighten up profitability it will be a badly damaged industry.

>> reporter: the proposed deal would be the latest mega merger following united, continental, northwest, delta, southwest and airtran and eta. u.s. airways and america west . some say that's enough.

>> right now, we still have a good semblance of competition within the airline industry and it's not like it would have been had this merger gone through.

>> well, the airlines had hoped to finish this deal to complete it by the end of september. that's not going to happen. they're vowing this all out fight. in the meantime, they will continue to compete against each other trying to undercut each other on fares and other airlines as well.

>>> i'll take it. thank you