Airline merger - the Justice Department’s strange move

  • Article by: Chicago Tribune Editorial
  • Updated: August 17, 2013 - 6:05 PM

The Justice Department has made a stunningly bad decision to block the merger of American Airlines and US Airways. The feds say the lawsuit filed last week alleging antitrust violations is intended to preserve competition in the airline industry. It is more likely to crush one or both airlines and stagger the industry.

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pumiceAug. 17, 13 9:42 PM

From the editorial: "Neither American nor US Airways has sufficient scale as a stand-alone company to compete effectively against United Continental and Delta." I wonder what Teddy Roosevelt's answer to that objection would be....

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twspt7Aug. 18, 13 8:30 AM

While I hate to see the growing monopoly forming in the airline industry, it is hard to understand why Justice is picking on American and US Air. The time to take a stand was two megamergers ago. Now it seems like Justice is favoring Delta and United over American.

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jdlellis1Aug. 18, 13 8:50 AM

1-Despite what consumers want (e.g. low fares), the hub and spoke business model which built the airline industry is no longer viable. This is in large part due to the eveloution of airplanes and airplane engines. Smaller, lighter more efficient airplanes can now travel long distances once reserved for larger aircraft. Thus the evolution of regional airlines. As technology evolves, major carriers will be global in their focus but today, there are too many major carriers (e.g. Excess capacity). Mergers or bankruptcy then becomes a reality. 2-Several years back, NWA attempted to buy Countintal Airlines and the justice department denied the request. Continental was eventually acquired by United (I think) and NWA by Delta. Instincts suggest that had the justice department allowed market forces to work NWA and its strong Minnesota emolpyee base would have remained in Minnesota.

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edcommentAug. 18, 13 9:19 AM

Count on the Chicago Tribune to leave out some important facts in its editorial zealotry. Recall the execs at Northwest and Delta were in a panic to get the deal approved before Bush left office. It takes "...look the other way.." regulation, which Bush personified, to do these deals. So, Justice is not being inconsistent. It just no longer sees itself as a facilitator for the executive suites of America.

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chuckdancerAug. 18, 1310:20 AM

Everyone has it correct. The mega mergers should have been stopped way before this, the action is inconsistent with the friends-of-business boys not currently in control, and technology has changed the way these companies can operate. The days when airlines gave the store away and the consumers traveled at unsustainable fares is over.

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