Airline decision leaves questions
The Department of Justice seems to have reached a point under the Obama administration where huge mergers are not simply rubber stamps anymore.
AT&T was prevented from joining forces with T-Mobile. Anheuser Busch-InBev had to change terms before buying Corona to gain approval.
Airline mergers have been the norm pretty much since the attacks of 2001 left the industry reeling. United and Continental, Delta and Northwest all were joined into pairs.
American-US Airways was next in line, but the department says it’s taking the best interest of consumers in issuing its challenge to the merger, on the grounds of lessening competition, which would lead to higher fares.
We’re wondering why now? Has the airline industry reached a point where there finally are too few to let the big ones merge any further?
Or is it a continuation of a pattern of meddling in the interests of business in the name of consumer protection?
If American Airlines is allowed to fall from operating in bankruptcy to closing down in bankruptcy because a legitimate suitor with the abilitiy to purchase and run a major air carrier is not found, we fail to see how that serves consumers any more than letting the merger continue.
If, rather, it is because US Airways claims that the airlines do not significantly overlap on routes are untrue the government needs to say much much more.
We’re also wondering if this decision is based on the view from the bureaucratic seats in Washington of operations of the near-sacred gate rights to access Reagan National Airport. Indeed, there are plenty of slots held by American and US Airways there, with a merged airline in control of 63 percent of the gates.
Beyond there, our region already knows the impact a big airline can have. Allegheny County pretty much built the Pittsburgh International Airport to the size needed to serve US Airways as a hub, only to find the airport unneeded at its massive size when US Airways pulled the hub out a few years later. It has taken decades for other airlines to slowly step in to provide competition for the traveling public, but the diminished airport remains a partially mothballed shadow of what it was meant to be.
Justice has some explaining to do, and it has to be for reasons about consumers beyond the Beltway.
Out here in “flyover territory” we’re just glad there are still airlines interested in our business.