Fri Feb 15, 2013, 02:39 AM
elleng (75,523 posts)
American Airlines Bulks Up.
American Airlines and US Airways announced Thursday that they would merge, creating the world’s largest airline. The deal should cause antitrust regulators and the flying public grave concern because it would leave more than 70 percent of the passenger business in the hands of four behemoth airlines, which would have unassailable holds on most of their hub airports.
The two airlines have argued that their merger would be good for fliers because it would allow American to better compete with Delta and United, the next two biggest airlines, each of which completed a megamerger of its own in recent years. Analysts also say that because American and US Airways compete directly on just 12 routes, the deal would not result in higher fares because in the rest of their business they complement each other.
But the Department of Justice’s antitrust division, which has to review the deal, should dig deeper. Though the overlap in routes is not large, it would essentially eliminate all competition on flights between several big cities like Dallas and Phoenix and Philadelphia and Miami, which are hub airports for the airlines. Unless the companies make concessions, like giving up some flights on those routes to other airlines, fares could rise significantly as they did after the United and Delta mergers, according to a study by the American Antitrust Institute and the Business Travel Coalition.
An even bigger concern is the substantial dominance the combined airline would have at large airports like Dallas-Fort Worth, where it would control 86 percent of all flights; Philadelphia, with 78 percent; Washington’s National Airport, 60 percent; and Charlotte, 92 percent. In the current airline system, control of hubs is everything.
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American Airlines Bulks Up. (Original post)
Response to elleng (Original post)
Fri Feb 15, 2013, 10:24 AM
mgc1961 (1,263 posts)
3. There will be a realignment without the DOJ becoming greatly involved.
With Dallas/Ft Worth and Los Angles so close to Phoenix I suspect PHX will lose some of their non-stop service to connecting service. Some aircraft may be used to open new routes or increase frequency to cities we now barely serve or not at all. The same may be true of Philadelphia with JFK, Charlotte, and Chicago so close. Of those airports, Charlotte will be probably be the least impacted because it serves so many cities in the southeast that American doesn't.
From Nashville, USAir and American are the only non-stop service to DCA (Washington-Reagan). We will probably drop some service there to reduce the number of empty seats, but that's not necessarily bad news for consumers since United flies to Washington-Dulles and Southwest to Baltimore. If we reduce service they will increase their flights just as Southwest did when American reduced Nashville from a hub of 300+ flights a day to just 33 now.
Response to elleng (Original post)
Sun Feb 17, 2013, 09:54 AM
davidpdx (22,000 posts)
4. The airlines are just going to continue to consume each other
until it's one big fucking monopoly. I can only afford to fly home from South Korea once every two years as it is so damn expensive. For two tickets from Incheon to SF it is about $2500, then add the cost of getting up to Portland (which is less depending if you can get on a lower fare airline). If we go this year I think we are going to wait three more years before going again.