The merger of American Airlines and US Airways

American Airlines-US Airways merger was announced months ago, while American authorities prohibited this action at that time. Economists concerned about a possible occur of monopoly. It is true that the merger of two of largest airline companies definitely is a threat to their competitors. They will become significantly more competitive compared with other companies in airline field if they complete merger. Consequently, their rivals will be forced to sell tickets with some favorable terms. In this case, the party that will receive most benefits is consumer segments.

However, as a tradeoff, it is recently reported that two companied gave up a number of takeoff and land slots in order to make American justice department approve of their merger. As a result, now-freed slots can be allocated to other small companies and those companies can have more chance to make profit. This indicates a less competition among airline area in long run. Which means the ticket price maybe increase and keep stable. It is the behalf of fliers that will be harmed.

American Airlines and US Airways are predicted to finish their merger successfully in December.

Sources:

http://www.theguardian.com/business/2013/nov/12/american-us-airlines-merger-justice-department

http://abcnews.go.com/Business/biggest-winners-losers-american-air-us-airways-settlement/story?id=20877291

http://www.washingtonpost.com/local/trafficandcommuting/justice-set-to-approve-merger-of-amr-us-airways/2013/11/12/2531b9f0-4bab-11e3-9890-a1e0997fb0c0_story.html

http://wallstcheatsheet.com/stocks/do-american-airlines-and-us-airways-really-need-to-merge.html/2/

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