Protecting consumers from a lack of competitiveness in the marketplace is the mission of the antitrust division of the U.S. Justice Department. Justice's opposition to the proposed merger of American Airlines and US Airways is appropriate, and so is Florida Attorney General Pam Bondi's decision to join the effort. Recent airline mergers have not been good for the flying public. There are now fewer routes and carrier choices, with increased airfares and fees. The proposed merger of American and US Airways would create the world's biggest single airline, and that's not likely to be a good deal for consumers.
Merger mania has gripped the airline industry. Since 2008, the department has approved the mergers of Delta Air Lines with Northwest, United Airlines with Continental, and Southwest with AirTran. This has reduced the number of carriers and led to fewer options for most airline routes. Under those circumstances, consumers lose leverage and carriers that dominate routes can dictate ticket prices and add-on fees. Smaller cities and destinations get less service and planes get fuller. Anyone who has suffered from a canceled flight knows how little wiggle room there is for such contingencies.
The timing for American and US Airways is unfortunate, coming at the end of this spate of mergers, but it is reasonable to consider consumer experiences from prior consolidations.
According to the department's lawsuit, joined by Bondi and attorneys general from five other states and the District of Columbia, popular airports and routes would be monopolized by the combined airline. For instance, 63 percent of the nonstop routes at Ronald Reagan National Airport near Washington would be exclusively served by the merged airline, according to the department. Elbowing out competition would cost consumers hundreds of millions of dollars, the department said.
Florida would be particularly affected. Of the 1,044 routes that would be hit hardest by consolidation, 216 routes, or 21 percent, would involve Florida cities. At Tampa International Airport, routes from Tampa to Tuscon, Ariz., and from Los Angeles to Tampa would be presumptively rendered illegally noncompetitive, according to the lawsuit. Bondi notes that American Airlines, which is in bankruptcy, does not need this merger to remain viable.
Air travel is an essential service that Americans need to conduct business, maintain family ties and engage with the wider world. The airlines have demonstrated that they will raise the price when they dominate or have a monopoly on a particular route. To protect the marketplace as a whole and consumers from monopolistic gouging, competition among as many carriers as possible remains important.