Even if the merger is eventually blocked by the DoJ, it might create consolidation opportunities among smaller airlines.

Investors betting on consolidation should consider setting their sights on regional and discountcarriers. Already, JetBlue (JBLU_) is speculated as garnering the interest of foreign air travel giants. Firms like Hawaiian Airlines (HA_) and Alaska Air (ALK_) could be attractive because of their regional focus.

Discount carriers like Republic Airways (RJET_), SkyWest (SKYW_) or Sprit Airlines (SAVE_) could also become the target of merger-hungry carriers, or consolidation among mid-tier players.

Sharp stock-price losses across the airline industry in the wake of the DoJ's announcement on Tuesday indicate investors see a blocked merger of American and U.S. Airways as negative for industry-wide pricing power and margins.

Still, as with the telecom sector, the DoJ's intervention could create an opportunity for those betting on the continued rationale for consolidation.

Investors should watch to see if a major hedge fund investor assembles a large stake in smaller regional and low-priced carriers. Such a move could indicate that the DoJ may have slammed the brakes on mega air-industry mergers, there is still room for consolidation.