Airlines stocks tank as DOJ challenges merger

AP News
Posted: Aug 13, 2013 12:11 PM
Airlines stocks tank as DOJ challenges merger

NEW YORK (AP) — Airlines shares slid Tuesday after the Justice Department and a number of state attorneys general challenged the proposed merger between US Airways and American Airlines' parent company, AMR Corp.

US Airways Group Inc. shares headed for their biggest loss since June 4, 2012. At midday, the shares were down 8.4 percent at $17.24. They have quadrupled since late 2011, when AMR filed for bankruptcy and US Airways began to pursue a merger.

AMR shares were taken off the New York Stock Exchange shortly after the company filed for bankruptcy protection in late 2011 but still trade over the counter; they were down $2.76, or 47.5 percent, to $3.05.

The proposed merger would create the world's largest airline by passenger miles, with 6,700 daily flights and annual revenue of roughly $40 billion.

Were the deal to be approved, the four biggest U.S. airlines — American, United, Delta and Southwest — would all be the products of a wave of mergers that began in 2008. Those deals have helped the industry control seats, push fares higher and return to profitability.

Stock of United Continental Holdings Inc., the current No. 1, dropped 5.9 percent to $31.25 percent.

Shares of Delta Air Lines Inc., the second-biggest airline, dropped 7.5 percent to $19.46.

Southwest Airlines Co., which flies the most passengers within the U.S., lost 3.1 percent to $13.29.

The selling struck shares of smaller airline too. JetBlue Airways Corp. shares shed 2.5 percent to $6.20, while Spirit Airlines Inc. stock slid 3.8 percent to $33.08.