Jan

8

Airline Mergers

Filed Under Airlines 

With US Airways proposing a merger with Delta Air Lines, United Airlines looking at Continental and AirTran seeking a merger with Midwest Airlines, some members of the business travel community are calling for the Department of Transportation and the Department of Justice to examine the consequences of airline mergers.

The Business Travel Coalition, an advocacy group for business travelers, predicts overwhelming competition problems. BTC chairman Kevin Mitchell says that the market power of resultant, reconfigured global alliances with antitrust immunity could be stunning. The impact on business travel:

  • Higher ticket prices as capacity is removed
  • Five major competing airlines become two
  • More mergers would follow
  • Mergers are short-term fixes that do not address systemic profitability problems of the airline industry

(Source: BTC statement)

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