The US Department of Justice’s lawsuit to block the merger of American Airlines and US Airways displays a concern that comes a little late.
As far back as the Reagan Administration, DOJ had ample opportunity to take aggressive action to block mergers. It’s concerned now about hub concentration? The Northwest Airlines-Republic Airways merger eliminated competition at the Detroit and Minneapolis hubs, where both carriers competed. The TWA-Ozark merger eliminated Ozark’s hub at St. Louis.
The new American would control 69% of the slots at Washington Reagan National Airport, and this is a concern? Consider:
- American is the only hub carrier now at DFW Airport.
- Southwest Airlines monopolizes Dallas LUV Field and nearly so at Houston Hobby Airport and Chicago Midway.
- United Airlines dominates Houston Bush Intercontinental Airport and Newark Airport.
- Delta Airlines controls Detroit, Minneapolis and Atlanta airports with a lop-sided market share.
And so on.
There are actually few directly overlapping routes and no competitive hubs between US Airways and American.
DOJ is concerned about job losses? Even the unions support this merger.
DOJ is concerned about the effect on consumers? Welcome to the club. All the previous mergers mentioned above were detrimental to consumers, but these cleared DOJ.
If United-Continental and Delta-Northwest were OK, this merger is, too.