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US Airways, American Air extend merger pact

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

(Reuters) - US Airways Group (LCC) and American Airlines on Monday said they had extended their merger agreement as they fight a U.S. government lawsuit seeking to block the combination, which would form the world's largest airline.

The companies said they extended the date by which either airline could terminate the merger pact to either January 18, 2014, or the 15th day following the entry of a court order approving the merger should it be entered on or before January 17, whichever is later.

The previous termination date for the deal was December 17.

Should the U.S. district court hearing the government lawsuit rule against the merger, the carriers said either party may end the agreement five days after the entry of an order prohibiting the deal.

The U.S. Justice Department and several states filed a lawsuit on August 13 to stop the merger of US Air and American parent AMR Corp (AAMRQ.PK), arguing that it would lead to higher fares and stifle competition. A federal judge will hear the case without a jury beginning November 25.

(Reporting by Karen Jacobs in Atlanta; Editing by John Wallace)