Analysis: Blocked US Airways-American merger could hurt consumers


The Department of Justice is missing the big picture by attempting to block the merger of US Airways (LCC) and American Airlines (AAMRQ.PK) or force a divestiture, according to airline industry analysts.

The take: Other carriers aren't ready to service smaller communities that could be clipped by the DOJ intervention and fares are moving higher on capacity cuts irrespective of the American-US Airways combination.

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Comments (5)
  • Drew Robertson
    , contributor
    Comments (373) | Send Message
     
    I am not sure Bangor and Sarasota flyers access to American flights to Sao Paulo is much of a consumer benefit. If airlines want/need oligopolies, we'll have to bring back the CAB.
    14 Aug 2013, 08:43 AM Reply Like
  • AsicsRunner
    , contributor
    Comments (19) | Send Message
     
    Those smaller city's are filling up the planes and making LCC profitable. Finally an analyst who get it!

     

    New fuel efficient planes cost billions of dollars and fuel costs are what it costs. Prices are going up and I wouldn't consider a 2% profit margin excessive like government pension plans.

     

    Those who can, do, those that can't, get into government! If lawyers were so smart they would be running business.

     

    I say United and Delta need a competitor like Doug Parker.
    14 Aug 2013, 10:38 AM Reply Like
  • RacerX1225
    , contributor
    Comments (115) | Send Message
     
    The DOJ in the USA is a JOK.
    14 Aug 2013, 11:19 AM Reply Like
  • Beachboy
    , contributor
    Comments (54) | Send Message
     
    Airlines are currently struggling to make a profit having to charge extra for bags, food, etc. which formerly were free.
    American and U.S. Air are in the merger business to make profits, not to cut competition per se. Compete is a word that America was built upon. American Air is barely lifting off after being in bankruptcy. Where is the American spirit of competition when a legitimate business needs it? Not downed by Federal Government in its infant stages. Should there be evidence of price fixing and monopolistic behavior, then it would be their job to investigate and prosecute such behavior, not BEFORE it actually happens. Why not shut down business in the U.S.A. since it is all based on competition?

     

    The DOJ is clearly picking on unproven "monopolies" which have yet to be proven, small markets notwithstanding-- which will need servicing by any airline daring enough to do the job. If those small markets lose American Airlines' servicing due to its failure to survive, what then? DOJ should stick to real problems instead of tilting at windmills which is their current occupation.
    14 Aug 2013, 11:37 AM Reply Like
  • jackooo
    , contributor
    Comments (1738) | Send Message
     
    DOJ should of gave their disapproval months ago. A blind man could of seen this is against all competition.
    14 Aug 2013, 11:44 AM Reply Like
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