The last hurdle of the merger of American Airlines and US Airways has being removed as the U.S. Justice Department gave its approval that led to the creation of the largest airline in the world.

The merger is a strategy that provides the combined airline a sustainable advantage over its competitors, such as the linked carriers of United and Continental. Synergy can be created through higher productivity, which would be achieved by the combination of increased efficiency, and the advantage of little overlap in the routes of the two airline.

According to the news the “airline sector has been known for financial woes despite ample demand for air travel”. This merger will not likely lead to decrease in price for ticket, rather, the price is expected to continue up a steady incline as the combined firm is one step closer to obtaining monopoly power.

The combined airline is also intensely focused on a new customer target of business professionals, who have the need to fly to places around the globe with few connections.

Link:

http://www.cbc.ca/news/business/american-airlines-us-airways-get-final-merger-ok-1.2424053