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Airline investors unnerved by merger roadblock

Airline investors who cheered mergers now unnerved by DOJ move to block American-US Airways

Airline investors unnerved by merger roadblock

Airline investors have benefited from mergers, so they're not too happy that the proposed tie-up between American and US Airways is in jeopardy.

Airline stocks fell for a second day Wednesday after the Justice Department sued to stop the merger.

The CEOs of both American and US Airways have said their airlines can prosper without the merger. But it's clear that investors think they would prosper more by combining -- and that other airlines would benefit as well.

US Airways shares had more than doubled since it began pursuing a merger with American in April 2012. They're down 14 percent since Tuesday.

Investors cheered mergers because of a belief that they lead to a more stable, profitable industry. Delta bought Northwest in 2008 and United and Continental merged in 2010.


Updated : 2021-01-20 08:52 GMT+08:00