An Unwise Airline Merger

The combined airline would also have to give up two gates at Boston Logan International, Miami International, Chicago O’Hare International, Los Angeles International and Dallas Love Field. With the exception of Love Field, where American has just two gates, the two airlines control many gates at those airports and relinquishing two at each will not make a big difference.

These steps do virtually nothing to address the issue of reduced competition in dozens of other markets and on routes where the two airlines currently compete for customers. In some cities like Phoenix, Charlotte and Philadelphia, the merged airline will have such a dominant position that its competitors will have a very hard time challenging it.

The antitrust division asserts the settlement is better than blocking the merger because it gives new, lower-cost airlines a chance to enter some airports by making gates or takeoff and landing slots available. The division assumes that the smaller airlines like JetBlue, which has a much more limited network, will ensure stronger price competition. But US Airways, which has an extensive network and aggressive business tactics, already offers lower fares than American in many markets.

Furthermore, the agreement simply ignores the central concern the Justice Department expressed in its lawsuit: the four big airlines — United, Delta, Southwest and the merged American — will have an even greater incentive to raise fares and fees because consumers will have fewer choices.

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