Delivering the Benefits? Efficiencies and Airline Mergers

Posted by Social Science Research Network

Delivering the Benefits? Efficiencies and Airline Mergers – Diana L. Moss American Antitrust Institute.

Abstract:    The merger of US Airways and American – a deal that will create the largest domestic passenger airline – will be a watershed for antitrust enforcement involving commercial aviation. It is the first contested case in which arguments that the merger would be likely to adversely affect competition and consumers drew upon direct evidence of higher fares and service cutbacks in previous airline mergers. This evidence bolstered the case made by the U.S. Department of Justice (DOJ), along with seven states and the District of Columbia, to enjoin the merger.2 US Airways-American, on the other hand, focused much of their response to the government’s Complaint on how the combination would produce substantial efficiencies, in the form of cost savings and consumer (“network”) benefits.