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Business groups ask U.S. to settle US Airways, American suit

An American Airlines jet takes off while U.S. Airways jets are lined up at Reagan National Airport on the day U.S. Airways' stockholders are expected to vote on whether to approve the $11 billion merger of the two airlines effectively creating the world's largest carrier, in Washington July 12, 2013. REUTERS/Larry Downing

WASHINGTON (Reuters) - Chambers of commerce from 26 U.S. states and cities have urged the U.S. Justice Department to settle its lawsuit opposing US Airways' (NYS:LCC) proposed merger with American Airlines (AAMRQ.PK).

In a letter released on Thursday, the chambers of commerce urged Attorney General Eric Holder to settle its lawsuit against the airlines, saying the combined carrier would be a more effective competitor against rivals like Delta (NYS:DAL), United (NYS:UAL) and Southwest (NYS:LUV).

Most of the chambers that signed the letter were from areas served by at least one of the two airlines. "This combination will benefit the U.S. economy, the airline industry and local communities throughout the United States," they wrote.

The Justice Department filed a complaint against the companies in August to stop the deal, saying it would lead to higher prices.

The case at the U.S. District Court for the District of Columbia is No. 1:13-cv-1236.

(Reporting by Diane Bartz; Editing by Bob Burgdorfer)