A US District Court judge on Thursday issued a preliminary injunction blocking Mesa Air Group's effort to replace Atlantic Coast Airlines' board as part of its unsolicited takeover attempt of the regional airline.

Meanwhile, Atlantic Coast said the US Justice Department has opened an antitrust probe into Mesa's USD$495 million takeover offer, joining a similar probe by District of Columbia antitrust officials.

A Mesa spokeswoman was not immediately available to comment.

But the two events represent a setback in the attempt by Phoenix-based Mesa to acquire Atlantic Coast, of Dulles, Virginia, and form a more powerful regional airline.

The injunction was handed down by US District Court Judge Rosemary Collyer, who determined Atlantic Coast had raised enough antitrust concerns pertaining to Mesa's takeover bid that its lawsuit against Mesa should be allowed to continue, court documents showed.

Collyer, a judge in the US District Court for the District of Columbia, said a deal struck last month between Mesa and UAL, the parent company of United Airlines, was of particular concern.

Specifically, Collyer said the deal, which would permit Mesa to provide regional service for United Airlines should it acquire Atlantic Coast, might violate the Sherman Act because it potentially restrains Atlantic Coast's ability to launch a low-cost competitor to United.

Earlier this month, Mesa Air filed a consent solicitation seeking shareholder support to replace Atlantic Coast's board with its own nominees.

Mesa Air Chairman and Chief Executive Jonathan Ornstein, speaking at the Wings Club on Thursday before the decision was handed down, said that should his airline lose its motion to dismiss the preliminary injunction request, it would have to evaluate whether to appeal or not.

The airline has promised to launch a hostile tender offer to acquire Atlantic Coast, but to date has not done so.

(Reuters)