The federal government says the proposed merger of American Airlines...

The federal government says the proposed merger of American Airlines and US Airways would cause "substantial harm" to consumers by leading to higher fares and fees. Credit: AP

The federal government this week challenged the proposed merger of American Airlines and US Airways, saying it would cause “substantial harm” to consumers by leading to higher fares and fees.

The airlines said the government’s conclusions were wrong, and vowed to use “all legal options” to fight back.

The government argued that the merger would hurt consumers around the country by eliminating a competitor on more than 1,000 routes. But the airlines said their merger would help customers and boost competition by creating a tough new rival to larger airlines United and Delta.

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