The US federal government and six states have taken legal action aimed at blocking a gigantic merger between American Airlines and US Airways.

AMR Corp and US Airways Group unveiled an $11bn (€8.25bn) all-stock deal that gives creditors of the bankrupt American Airlines parent control of the combined airline.

American Airlines and US Airways will merge and create the world's biggest airline after the boards of both companies approved the deal early today, sources close to the situation said.