The U.S. Justice Department, joined by the attorneys general of six states, filed a lawsuit to block the merger Tuesday in federal court in Washington, D.C.
The government's challenge threatens to quash a deal that would create the world's largest airline by passenger miles. The airlines could challenge the government in court, or possibly agree to concessions that would convince regulators to approve the merger.
The lawsuit caught many observers by surprise. In the last five years, antitrust regulators had allowed three other major airline mergers to go ahead, leaving five airlines in control of about 80 percent of domestic market. But the government argued that this merger would hurt consumers around the country by eliminating a competitor on more than 1,000 routes.
If the merger leads to even small increases in ticket prices or airline fees, it would cost American consumers hundreds of millions of dollars each year, the department said.
As examples, the government cited round-trip fares for travel this month between Miami and Cincinnati and between Houston and New York in which US Airways' fares are far lower than American and other competitors.
Shares of both airlines plunged on news of the lawsuit. US Airways Group Inc. shares fell $1.66, or 8.8 percent, to $17.16 in midday trading. 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 $2.43, or 41.8 percent, to $3.38.
Neither US Airways Group Inc. nor American Airlines parent AMR Corp. commented immediately on the lawsuit.
Last year, business and leisure travelers spent more than $70 billion on airfare in the United States. Consumer advocates cheered the lawsuit.
"This is the best news that consumers could have possible gotten," said Charlie Leocha, director of the Consumer Travel Alliance and member of a panel that advises the government on travel-consumer issues. He said that recent mergers had led to higher fares and fewer flight choices and this one would have the same result.
The lawsuit will not necessarily stop the deal. The airlines could fight back in court, but it might not even get that far.
Analysts said that the Justice Department, which has been talking to the companies for months, could be seeking more time and leverage to squeeze out some concessions. Many experts had expected regulators to pressure American and US Airways into giving up some takeoff and landing slots at Reagan National Airport, allowing for new competitors at the busy airport, which is just across the Potomac River from downtown Washington.
Even outside the two companies, many in the airline industry had expected that the deal would easily win regulatory approval like Delta's purchase of Northwest, United's combination with Continental, and Southwest' acquisition of AirTran.
Justice Department officials "didn't have any problem with the Northwest-Delta merger; didn't have any problem with United-Continental. Where did they think it was going to go?" said Robert Mann, an airline consultant who once worked at American.
At the least, the lawsuit could delay AMR's exit from bankruptcy and make a merger slightly less likely, said Daniel McKenzie, an analyst for Buckingham Research Group.
AMR and US Airways announced in February that they planned to merge into a carrier with 6,700 daily flights and annual revenue of roughly $40 billion. By passenger traffic, it would slightly eclipse United Airlines and Delta Air Lines. Along with Southwest Airlines, the deal would leave four airlines dominating the U.S. market.
Mergers have helped the industry limit seats, push fares higher and return to profitability. AMR and US Airways officials had said their merger would help consumers by creating a tougher competitor for United and Delta.
AMR has cut labor costs and debt since it filed for bankruptcy protection. Pilots from both airlines have agreed on steps that should make it easier to combine their groups under a single labor contract, a big hurdle in many airline mergers.
A federal bankruptcy judge in New York was scheduled to hold a hearing Thursday to consider approving AMR's reorganization plan - one of the last steps before the merger would be completed. The hearing was expected to go ahead. The merger has been approved overwhelmingly by AMR creditors and shareholders and by US Airways shareholders.
In its lawsuit, the Justice Department was joined by the attorneys general from American's home state of Texas, US Airways' home state of Arizona, plus Florida, Virginia, Pennsylvania, Tennessee and the District of Columbia.
And then with one out in the eighth inning, Carlos Corporan ended Darvish's latest bid with a home run.
Darvish once again neared perfection versus Houston, striking out a career-high 15 and permitting only one hit in eight innings as the Texas Rangers won 2-1 Monday for their season-high eighth straight victory.
"A win's a win," Darvish said through a translator. "I'm just glad I was a big part of this win."
Texas won for the 13th time in 14 games and headed home atop the AL West.
In early April, Darvish (12-5) was one out away from a perfect game at Minute Maid Park before Marwin Gonzalez singled between his legs. Darvish joined Nolan Ryan as the only pitchers in team history to have more than one start of at least eight innings with one hit or less.
Darvish became the first pitcher to have two no-hitters broken up in the eighth inning or later since it happened to Justin Verlander in 2011.
Outfielder Alex Rios chased Corporan's drive to the wall, but had to watch as it sailed about five rows into the stands. Darvish simply looked around, and then wiped his brow with his arm before preparing to throw his next pitch.
"Well, I'd like to see it happen of course," manager Ron Washington said. "But those are professional hitters over there, too, and Corporan caught one."
Until the homer, Houston's lone runner came when rookie Jonathan Villar drew a two-out walk on a full count in the sixth. Texas catcher A.J. Pierzynski was ejected for arguing with plate umpire Ron Kulpa about a 2-2 breaking pitch he called low - Pierzynski was tossed after Villar walked.
"Was it a strike? I don't know," Pierzynski said. "Obviously I thought it was and Ron didn't, and I was upset we walked the guy and I said a bad word and I was ejected."
Darvish was perplexed by the actions of his catcher.
"When he got ejected, I thought, `What is he doing?" Darvish said with a laugh.
The two-time All-Star ace from Japan was sharp all game, retiring the last two batters in eighth and exiting after increasing his major league-leading strikeout total to 207.
"He used everything today: slider, curveball, cutter, fastball," Washington said. "He moved it around, kept them off-balance. When they were looking for breaking balls he was throwing fastballs and cutters and when they were looking for cutters he was throwing breaking balls."
"I was pretty locked in," he said.
Darvish struck out 14 in four prior games this year, including his earlier gem at Houston. His 15 strikeouts on Monday matched his career-high from his professional career in Japan.
He is 3-0 with a 1.52 ERA and 37 strikeouts in three starts in Houston this season, and is 4-1 with a 1.31 ERA and 50 strikeouts in five starts since returning from the disabled list.
Joe Nathan pitched a perfect ninth for his 35th save.
The AL West-leading Rangers took a quick lead over the last-place Astros. With two outs in the first, Ian Kinsler and Adrian Beltre doubled and Pierzynski hit an RBI single off Brett Oberholtzer (2-1).
Oberholtzer yielded seven hits and two runs with six strikeouts in 6 2-3 innings for his first loss in three major league starts.
The Houston hitters had no such luck with Darvish.
Darvish was strong from the start relying mostly on a four-seam fastball, sliders and a cutter against the Astros' inexperienced lineup.
"He doesn't just have control. This guy has command," Houston manager Bo Porter said. "He can throw every pitch the way he wants to throw it, even out of the strike zone. Which, when you have that kind of repertoire, you're going to be up against it."
He struck out the side in the first inning before getting two fly outs and a ground out in the second.
The 26-year-old righty fanned two each in the third and fourth innings, struck out the side in the fifth and the first batter of the sixth inning. His strikeout of Chris Carter to start the fifth was his 200th of the season, giving him a team record for fewest games (23) needed to reach the mark.
In the sixth, Darvish started walking off the mound after his close pitch to Villar. Pierzynski also began heading to the dugout, but Kulpa said it missed.
Pierzynski didn't like the call. After the walk, started yelling in Kulpa's face and was quickly tossed. Geovany Soto took over at catcher.
Darvish, a two-time MVP in Japan, flirted with perfection last Sept. 3, too, retiring the first 17 batters at Kansas City.
NOTES: Injured Texas DH Lance Berkman is getting Monday off and will DH for Double-A Frisco on Tuesday and Wednesday and will be re-evaluate him after that. ... Neftali Feliz, who was expected to throw Saturday for Round Rock but did not pitch as a precaution because of mild right arm triceps tendinitis, has been shut down. Feliz has been rehabbing from Tommy John surgery last year. ... Darvish set rookie franchise records for wins (16) and strikeouts (221) last season. He finished third in AL Rookie of the Year voting behind winner Mike Trout and Oakland outfielder Yoenis Cespedes.
ST. LOUIS (AP) - A $1,000 reward is being offered in the search for the person or persons responsible for killing a kitten in north St. Louis.
The animal was found dead Aug. 1 in the front yard of a home. The resident of the home had been feeding the kitten and came home to find it in a pool of blood on her sidewalk. Nearby was a rock that was believed to be used to kill the kitten.
The reward is being offered by the Humane Society of Missouri Animal Cruelty Task Force.
SPRINGFIELD, Ill. (AP) - Gov. Pat Quinn signed legislation that lets casinos and race tracks garnish gambling winnings from parents who owe back child support.
The new law that was signed Monday takes effect immediately. It's aimed at chipping away at the state's nearly $3 billion backlog in unpaid child support.
The Springfield bureau of Lee Enterprises newspapers (http://bit.ly/167lzRU ) reports the money would be turned over to the Illinois Department of Healthcare and Family Services. From there, it'd be distributed to parents.
Race tracks and casinos will have to post signs warning gamblers that their winnings may be garnished if their names surface in a database.
The measure was sponsored by Dunlap Republican Sen. Darin LaHood. He says up to $1 million in back child support could be collected in this first year.